TANESCO, Symbion Power signs MOU for a joint venture in 400MW Mtwara plant

 

TANESCO and Symbion Power today signed a Memorandum of Understanding for building and operating a 400MW power plant in Mtwara through a Public Private Partnership.  The work will include the construction of a 650 km transmission backbone from Mtwara to Songea where it will be connected to the TANESCO national grid through a line that will be built from Makambako to Songea.

This development will be phased and it will take three years from financial closure to completion.  The first phase will involve increasing the existing capacity in Mtwara to meet the growing demand in the southern regions including Lindi and Mtwara.  Engineering study work will commence in March.

TANESCO and Symbion have been in discussions since Symbion presented a proposal to TANESCO and the Ministry of Energy in September 2012.  This has now led to the signing of the board-approved MOU that allows the two companies to form a Public Private Partnership and develop the project.  It will take around 12 months to put the necessary financing in place before the three-year clock begins to tick.

Speaking at the signing of the MOU in Dar es Salaam, Paul Hinks, the Chief Executive Officer of Symbion Power said, “The south of this country has been starved of energy for decades and this has severely stunted its development.  This project will succeed because it includes transmission lines that will feed the grid system.  The transmission lines will be owned exclusively by TANESCO but they will be built as a part of the project.”

“Symbion and TANESCO will be working with a number of international funding agencies, banks and private equity firms in 2013 to put the financial package together, many of whom have already expressed great interest in the project.   We are hopeful that U.S. government agencies such as the U.S. Exim Bank and the U.S. Overseas Private Investment Corporation will show keen interest in the investment too.”

“In the three years since Symbion came to Tanzania we have seen rapid development and improved network stability.  Tanzania will in the future have an abundance of gas and it can become entirely self sufficient and even a regional exporter to countries that are not blessed with the fuel resources that are available in the country.  The days of complete reliance on rain-driven hydro electric systems are gone and alternative sources of power need to be implemented to ensure that there is security of supply.”

Speaking during the signing event, TANESCO’s Acting Managing Director Eng. Felchesmi Mramba said, “For many years the Southern part of the country has been suffering from poor power reliability due to the region not being connected to the National Grid. However, through this planned partnership, Lindi, Mtwara and Ruvuma will be connected to the National Grid.  Connecting the Southern regions to the National grid will significantly improve reliability of the entire network.  This is one of the ways TANESCO can benefit from the PPP arrangement whereby the Public and Private sector join forces to undertake projects that would otherwise be difficult to implement.”