Prime Highlights:
- Tanzania is strengthening its energy infrastructure to support industrial growth and attract both local and foreign investment.
- The country is using natural gas, renewable energy, and regional cooperation to position itself as a leading industrial hub in East Africa.
Key Facts:
- Hydroelectric power accounts for about 60% of Tanzania’s energy supply, prompting efforts to diversify into natural gas and solar energy.
- Gas pipelines from southern Tanzania supply over 45 major industrial users in Dar es Salaam, supporting key manufacturing sectors.
Background:
Tanzania is strengthening its energy infrastructure to support industrial growth by ensuring steady and affordable power for manufacturing and attracting local and foreign investment. This strategy reduces dependence on hydroelectric power, which makes up about 60% of the country’s energy but can be affected by droughts.
“Energy infrastructure is often referred to as the first domino in the chain of industrialization because it sets everything else in motion,” said Elias Ngunangwa, Head of Client Coverage, Corporate and Investment Banking at Stanbic Bank Tanzania. Dependability of power is important to expand manufacturing, generate employment, and facilitate general economic development.
The natural gas industry of Tanzania is the key to this development. Fields such as the Songo Songo provide gas to major industries such as cement, steel, glass, and textile industries. In Tanzania, gas is added to Dar es Salaam via the pipeline to supply it to more than 45 large industrial consumers in the South.
This assists in maintaining a stable source of energy and enhances the trade competitiveness of the country in the region. It is also significant in the regional energy cooperation. Joining the East African power pool will enable Tanzania to sell additional gas to the neighboring states, making it more influential as the energy producer in the region.
These massive infrastructure construction projects need innovative funding. Tanzania Stanbic Bank offers differentiated financial services, capacity building initiatives, and promotes alternative financing models like Public-Private Partnerships (PPPs) or green bonds.
David Kafulila, the Executive Director of the Public-Private Partnership Centre in Tanzania, said that Public-Private Partnerships contribute to the funding of construction, the introduction of technical knowledge, and the acceleration of the development of significant infrastructures such as power lines.
Tanzania is creating a robust basis of long-term industrial development by investing in infrastructure, alternative energy sources, interacting with the neighboring states, and making use of innovative financing. These are making the country one of the major industrial centres in East Africa.
