Tanesco

COMPANY PROFILE

2015

Tanesco

www.tanesco.co.tz | (+255) 023 233 3902

Power for the people Editorial: Colin Chinery

Tanzania is a nation whose vast economic potential and social betterment have long been thwarted by grave deficiencies in power generation and supply. Now a major Government blueprint is geared for a sweeping transformation, with state-owned energy utility TANESCO a core player.

TANZANIA is one of the world’s 20 fastest-growing economies; 7% annual GDP growth, significant deposits of natural gas and other resources, and an increasingly liberalised economy pitched to attract foreign investment.

It also has one of the most ambitious development plans. With two in three of Tanzania’s 45 million living below the property line, the

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Government’s Development Vision (TDV) 2025 wants to transform Tanzania into a middle income country within ten years - a goal requiring at least a tripling of income per capita now standing at $640.

To meet these targets a country with one of the lowest electrification levels in the world needs adequate, reliable, affordable and environmentally friendly electricity supply.

And to do this, the TDV envisages boosting installed power capacity to at least 10,000MW over this period, a tenfold increase on current figures.

KEY ROLE It’s an ambition in which Tanzania’s sole electricity-focused utility company, TANESCO – Tanzania Electric Supply Company Ltd – will play a key role.

TANESCO The country’s sole electricityfocused utility company and a parastatal organisation under the Ministry of Energy and Minerals, TANESCO’s vertically integrated structure extends across generation, transmission, distribution and sale of electricity to the mainland, as well as bulk supply across the water to Zanzibar.

“Our customer base has doubled in the past three years and we are heavily involved in a range of marketing activities to achieve the best ways of delivering power to our customers,” says Managing Director Felchesmi Mramba. “In 2011/12 we had less than 700,000 customers; now we have 1.4 million.”

While TANESCO’s Generation division is responsible for all its power generation functions, other sources of generation are deployed by independent power producers (IPPs) feeding both the national grid and isolated areas.

TANESCO’s generation system consists mainly of hydro and thermal based generation - hydro contributing about 40% while gas and liquid fuels provide the remainder.

But with a growing energy deficit caused partly by recurring droughts that have crippled hydropower capacity, the company has implemented a thermal hydro power generation mix programme, with significant generation coming from gas and diesel through TANESCO plants and IPPs. “Over the past five years we have invested in a number of power plants which are generating natural gas. We are also embarking on investing in Halle, a hydro plant, to make it more efficient, while a number of projects where feasibility studies have been completed are now ready for implementation,” says Mr Mramba.

BACKBONE The Backbone Transmission Investment Project aimed at solving unreliability issues, is due to be completed next year. Backed by among others, the World Bank and the African Development Bank (ADB) - this is a major TANESCO project being implemented in Dodoma, with 400Kv capacity overhead transmission line from Iringa to Shinyanga.

The project is divided into three lots, one extending from Dodoma in Tanzania’s heartland to Iringa, the second from Dodoma to Singida, and the third from Singida to Shinyanga region.

But TANESCO’s strategy also has a continental outreach. Agreements such as SAPP, the Southern African Power Pool, link South Africa, Zambia, Zimbabwe and Mozambique in power trading partnerships. Now Kenya, Tanzania and Zambia are set to spend $1.4 billion to link their power grids by 2018 and create a regional power pool for trading electricity.

The three countries will build 2,302km of 400 kilovolt power lines and 373km of 330kV power lines, with each country responsible for the lines within its jurisdiction.

The connector project will link the East African Power Pool (EAPP) to SAPP, promoting electricity trade and security of supply.

Implementation will also foster regional integration in the three states by consolidating work relations through supply mechanisms.

area south of Dar es Salaam where the natural gas pipeline from Mtwara will terminate.

“Kinyerezi I is a 150MW plant, and the only point we are not sure about is whether at its opening natural gas will be flowing in the pipeline.

But if not, it’s a dual fuel plant which means we can use liquid fuel or natural gas.”

Kinyerezi II is a 240MW combinedcycle project contracted to a Japanese company, while Kinyerezi III generating 600MW is a joint project with the Shanghai Electric Power Company. Kinyerezi IV, another joint venture with a Chinese company, will generate 330MW. “Other ventures include Mtwara - a 400-600MW project we are undertaking with General Electric and Symbion Power Tanzania to boost electricity in southern regions and the rest of the country – Kilwa, where we are engaged with an IPP for a 320MW combined cycle plant, and another IPP venture, a 225MW project in Bagamoyo.”

NATURAL GAS Meantime, short term TANESCO projects include four at Kinyerezi, an

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A transmission line to Songea, situated close to the Malawi border will also be constructed to deliver power to a region of huge economic potential among industries such as uranium extraction and other mining sectors. “Altogether within Tanzania we want to have a network of 400kV transmission lines throughout the country.”

BIG ROLE FOR RENEWABLES Unsurprisingly given Tanzania’s considerable potential, Mr Mramba is a keen exponent of renewables: “Tanzania is very well positioned for renewable projects. The Great Rift Valley for example, acts as a wind tunnel, which means that in many places wind power generation is very viable. And since we are very close to the Equator, solar energy is also a plentiful resource waiting to be tapped.

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“Over the past two years we have recorded significant investments and a 60% increase in revenues”

“And with many opportunities for power generation, we will start by generating more from natural gas, and then slowly diversify into coal, renewables, and hydro-electricity.

“Going forward I believe renewables are going to make a big contribution to power generation.

TANESCO is very much part of this movement, and we believe renewable projects are the projects of the future - and that future is already here.”

The rapid growth of demand for electricity, over-reliance on hydro generation and soaring energy losses from ageing transmission and distribution systems have hampered efficient distribution of electricity.

Against this backdrop TANESCO is unfolding plans to make major institutional reforms and transformation to improve efficiency in service delivery.

These include re-organising

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Oryx Oil Company Limited, Plot No. 2 Nelson Mandela Road, Kurasini, P.O. Box 9540, Dar es Salaam, Tanzania, Tel: +255 22 551 40 00, Fax: +255 22 212 04 05 oryx.tanzania@oryxenergies.com

Oryx Energies - With you every day Oryx Energies is one of Africa’s oldest and longest established independent providers of oil and gas products and services, with a presence in over 20 countries across the continent.

We are committed to providing the energy products and services that help drive economic and social development across sub-Saharan Africa, in particular fuels, lubricants, LPG and, more recently, bitumen to support infrastructure development.

Our reputation as a professional and reliable partner is anchored in a business model that enables us to master the full value chain from the initial purchase of products on the open market to ensure a secure supply (via our trading arm); their storage at strategic locations across East and West Africa; and product delivery to end users, including consumers, industry and maritime operators.

Oryx Energies has been in Tanzania since 1999 and has built a solid reputation for the quality and reliability of its products and services. We know that this helps our customers go the extra mile, every day, as our products keep their cars, motorcycles, trucks, ships, generators and heavy plant machinery on the move; and help families with their cooking, heating and lighting at home.

For consumers, our network of service stations, retail outlets and distributors offer easy access to Oryx Energies fuels, lubricants and LPG across the country.

We have a leadership position in LPG in Tanzania that reflects our strategy of promoting it as a safe, affordable, healthy and ecological energy in Africa. We strongly support local and international efforts to replace the use of firewood and charcoal, to improve health, reduce deforestation and greenhouse gas emissions. Whether LPG in cylinders for consumers or in bulk for commercial and industrial use, we ensure a quality and reliability that our customers can depend on. We demonstrate our commitment to product availability, as the only company in Tanzania that has invested in an LPG storage sphere.

Similarly, our ISO-9001 lubricants blending plant in Dar es Salaam produces a full range of quality lubricants, designed to keep engines running and running, and serves Tanzania and the rest of East Africa. It also blends for third parties, including oil majors. Our products include automotive and industrial plant lubricants, a full range of greases as well as engine coolant, cutting fluids, and degreasers. They all carry approvals from the American Petroleum Institute and meet the specifications of all major equipment manufacturers.

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Oryx Energies also supplies the majority of mines in Tanzania, together with exploration companies off the coast of Mtwara.

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We thus enable our clients to concentrate on their business, while we look after their energy needs. In addition, we develop tailor-made value-adding solutions to reduce the total cost of operation and ensure all HSSE aspects meet, or exceed, site standards.

Oryx Energies also transits fuels and lubricants from Tanzania, as a strategic hub, to neighbouring countries, to help ensure they also have the energy supplies they need.

We are proud of our reputation of responding to the evolving energy needs of Africa for over 25 years. We continue to invest strongly and look forward to continuing to support Tanzania’s development in the coming years.

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TANESCO procurement, empowering regional offices to operate independently, strengthening electricity billing systems, improving customer service, and the replacement of all manual power meters with prepaid.

“Over the next three years, the company will have removed all old-fashioned meters and installed prepaid meters across the country, with customers required to pay their bills only through banking institutions or mobile banking services.

“We shall be introducing new initiatives to improve services and make our company grow. For example we want to speed up the installation of pre-paid meters for our customers, giving them a choice in the way they can buy electricity from us.

“We have now introduced mobile payment systems for customers using credit meters, which means

“With our continuing drive to take power into the rural areas we need to train young engineers working in generation, transmission and distribution”

they can stay in their homes and make bill payments without going into our offices. We’re also set to start informing our client on power interruptions through text messages.

“We are also improving on other services, especially giving people to apply for our services the opportunity of going on-line instead of travelling to an office to make application for their power.”

TANESCO’s origins reach back to 1908 when Tanganyika - as Tanzania was then called - was a German colony. The first public electricity supply created at Dar es Salaam, and when the Tanganyika territory was mandated to Great Britain in 1920, a Government Electricity Department was formed to take over and operate the public supplies left by the Germans. continues on page 22 ...

“Independent Power Tanzania Limited (IPTL), a subsidiary of Pan Africa Power Solutions (T) Limited (PAPS) is proud to serve in the Tanzania Energy Sector, working closely with Tanzania Electricity Company (TANESCO) to ensure affordability of electricity to all Tanzanians.

We strive to be the largest independent power producing facility in East Africa with an additional 500MW expansion, powered with a first phase 200 MW Wartsila Gas Engines to cut the cost of power supply throughout Tanzania.

We are committed to working with TANESCO to lighten up lives of many Tanzanians by providing reliable and affordable energy for economic growth of this country.

IPTL/PAP is here to serve.”

INDEPENDENT POWER TANZANIA LIMITED PLOT 292/1,292/2,292/3,296 BLOC D SALA-SALA. TEGETA, P.O.BOX 77173, DAR ES SALAAM, TANZANIA

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InterOil

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Thirteen years later it was handed over to private enterprises, among them the Tanganyika Electric supply Company – TANESCO - and another the Dar es Salaam and District Electric Supply Company.

When Tanganyika gained independence in 1961, TANESCO started planning new power projects to meet the increasing industrial, commercial and rural township power supply demands.

Between 1964 and 1979 the Government acquired 100% of the shares, the two companies merging. And over this period the percentage of Tanzanian employees rose from 87% to 99.5% while those in senior positions went from 19% to 99%.

SKILLS – NEEDS AND OPPORTUNITIES “With the growth of TANESCO over the past three years, staff numbers have increased, especially in the rural areas. With our continuing drive to take power into the rural areas we need to train young engineers

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working in generation, transmission and distribution. We also need skills on the softer side such as marketing, customer service and finance.”

In 1992 TANESCO’s monopoly ended when the Government began allowing IPPs to generate and sell power to the TANESCO grid for transmission and distribution with the intention of creating better service for electricity customers. Organisational and operational reforms have continued, and last year an unbundling and restructuring plan was rolled out aimed at enhancing efficiency and attracting investments in the energy sector in line with the country’s growth blueprint, Vision 2025.

“The market has opened up and we have received interest from many companies who want to invest in becoming independent power producers and in public/private partnerships. So while we have been leaders in power generation we expect competition to grow and increase as time goes on.”

Mr Mramba joined the company in 1996 as a trainee engineer, subsequently working as an

engineer, senior marketing manager, and Deputy Managing DirectorDistribution, with the responsibility of overseeing Distribution functions in the Company before his appointment as TANESCO’s Managing Director.

Pan-African and global positions include the chairmanship of the Power Institute for East and Southern Africa (PIESA), the voluntary regional power utility association aimed at improving the electrification in East and Southern Africa through sharing information, research, technology and skills.

ACHIEVE AND ENVISAGE Tanzania and TANESCO face challenging issues and life-changing opportunities, and Mr Mramba, a visionary and a realist, is encouraged by the progress taking shape.

“Over the past two years we have recorded significant investments and a 60% increase in revenues.

When I look at TANESCO I see many improvements, greater power stability and reliability, and a significantly enhanced level of service to our customers, the people of Tanzania.”

TANESCO

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