Tanzania’s Power Import Strategy: A Critical Analysis of Ethiopia Electricity Deal
Tanzania’s recent decision to import 100MW of electricity from Ethiopia at 7.7 US cents per kilowatt-hour has sparked intense debate about the country’s energy strategy and long-term power generation approach.
The government presented multiple rationales for the power import deal, including reducing transmission losses, leveraging cheaper electricity rates, and supporting regional energy integration. While the proposal aims to address power shortages in northern Tanzania, critical questions emerge about its economic feasibility and strategic wisdom.
Key Concerns in the Power Import Strategy:
1. Cost Effectiveness: The annual expenditure for this import will reach approximately 177 billion Tanzanian shillings, potentially exceeding 1 trillion shillings by 2030.
2. Domestic Alternatives: Tanzania possesses significant untapped potential in geothermal, solar, and wind energy. With 52 geothermal sites nationwide and abundant solar resources, local power generation could be more economically advantageous.
3. Overlooked Opportunities: The country has substantial coal reserves and renewable energy potential that remain unexplored, suggesting a need for more comprehensive energy planning.
Critical Observations:
– Domestic power plants offering rates as low as 4 cents per kilowatt-hour have been previously rejected
– The decommissioning of efficient local power generation facilities raises questions about current energy policies
– Uneven focus on power development across different regions indicates potential strategic inconsistencies
The Ethiopian power import deal underscores broader challenges in Tanzania’s energy sector, highlighting the urgent need for a more strategic, locally-focused approach to power generation and distribution.
While cross-border power purchases can be beneficial, they should complement—not replace—robust domestic energy development strategies that prioritize local resources, economic efficiency, and long-term national energy security.
