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.”