East Africa: Region Eyes Cheap Power

Dar Es Salam — The envisaged Stiegler’s Gorge hydro power project by Rufiji Basin Development Authority (RUBADA) which aims at producing 2100mw is expected to benefit the East African Community (EAC) partner states upon its completion.

RUBADA’s Director General, Dr. Aloyce Masanja told East African Business Week in Dar es Salaam that EAC states are among the target countries that RUBADA is expected to trade with once the project starts production.

“EAC should get ready as we are expect to sell part of the extra electricity to them for as cheap as $4 per kilowatt per hour including levy,” Dr Masanja said last week at his office in Dar es Salaam during the exclusive interview.

The rate according to Dr Masanja is the smallest compared to tariffs within the country. Tanesco charges $10 per kilowatt per hour. Elaborating on why they have decided to use hydro power system which seemed to be outdated as it depends on water by 100% to generate power, Dr Masanja said that the hydro power scheme is the cheapest way than any other sources of energy.

“We are not expected to experience any water shortage as what it used to be at Mtera and Kidatu, Masannja said, adding that we will construct a dam at an area where have good source of water and receive enough rainfall.”

Dr Masanja said that the project is expected to be constructed into two phases. The first phase is expected to produce over 1000mw while the second one will produce the remaining mw. He said that Stiegler’s Gorge hydro power project which is expected to create direct and indirect to about 420,000 people is estimated to cost over $2bn once completed.

The Brazilian dam construction firm, Odebrecht International has already submitted a proposal for the project to RUBADA last week followed a Memorandum of Understanding (MoU) between the authority and the Brazilian firm six months ago.

Tanzania has been experiencing power shortages due to decline of water level at its main sources of electricity at Mtera and Kitadu dams. Masanja said the better use of potential areas such Ruaha and Gorge could end the crisis.

According to Mr Masanja, the proposal will now give a clear picture on the implementation of the project.

The proposal touches mainly on Power Market Overview, Engineering Studies and Technical Proposal, Preliminary Social-Environmental Evaluation, Key Stakeholders, Stage One Risk Analysis and Financial Structure and Proposed Business Plan.

RUBADA as a public institution is allowed by law to generate and supply hydroelectric power in the basin and will partner with Odebrecht, a private entity in the form of Public Private Partnership (PPP).

“The project is multipurpose by nature and will benefit various sectors including agriculture, energy, fisheries, flood control and tourism,” he said.

The Brazilian company reviewed feasibility study that was earlier conducted by a Norwegian company, NORCONSULT in 1980 on the same project but was later shelved.

The next stage after reviewing the proposal will be designing and doing Environmental Impact Assessment (EIA) while the third stage will be commencement of construction.

On his part, the Brazilian company’s New Business Director, Mr. Fernando Soares, said that his company understands the importance of the project, not only for Tanzania but for the whole EA region.

“We are proud to be part of such an important endeavour,” he said, adding that Odebrecht can provide great value to their clients bringing the necessary engineering and construction expertise, as well as proven local knowledge and motivation to pursue a well-balanced contractual relationship.