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US & CHINA INVESTMENT EFFECTS ON
TANZANIA’S ENERGY SECURITY
AMY ROZNOWSKI
TANZANIA’S ENERGY FUTURE (?)
NATURAL GAS – 53.28TCF
(9.2B BARRELS OF OIL EQUIVALENT)
COAL – 1.9B TONS (25% PROVEN)
HYDRO – 4.7GW POTENTIAL
(12% DELIVERED)
SOLAR – 200Wp/m²
GEOTHERMAL - ~5000MWe
50 IDENTIFIED SITES
CURRENT TRILEMMA STATUS
ENERGY SECURITY
ABUNDANT RESOURCES
DEPENDENT ON ENERGY IMPORTS
ELECTRICITY GENERATION PRIMARILY HYDRO
DROUGHT, XMSN, & DISTRO LOSSES
ENERGY EQUITY
HIGH PETROLEUM IMPORT AND ELECTRICITY COSTS
AKA UNAFFORDABLE
24% ACCESS TO GRID ELECTRICITY
ENVIRONMENTAL SUSTAINABILITY
LOW CARBON EMISSIONS
INCREASING DEMAND FOR ENERGY ~10% PER YR
MAINTAIN CARBON FOOTPRINT?
HIGH RELIANCE ON BIOMASS FUEL & DEFORESTATION
GOVERNMENT OF TANZANIA ENERGY SECTOR OUTLOOK
GOALS FOR ENERGY SECTOR
INCREASE ELECTRICITY ACCESS TO 50% BY 2025 AND 75% BY 2033
INCREASE ELECTRICITY GENERATION TO 3000MW BY 2018 AND 10000MW BY 2025
REDUCE TRANSMISSION LOSSES TO 12% BY 2018
NEED TO ATTRACT INVESTORS AND REFORM ENERGY SECTOR
EWURA, TIC, PPP ACT, SOUTHERN AFRICAN POWER POOL
IMPROVE BUSINESS ENVIRONMENT
INCREASE COMPETITIVENESS & TRANSPARENCY
FOCUS AREAS
RESOURCE DIVERSIFICATION (RENEWABLES & NG)
IMPROVE EFFICIENCY
ENCOURAGE PPP
MOBILIZE FINANCING FOR INVESTMENTS
DEVELOP HUMAN CAPITAL
CUE THE INVESTORS
CANNOT ENHANCE ENERGY
SECURITY WITHOUT OUTSIDE
INVESTMENT/ASSISTANCE
CHALLENGES TO ATTRACTING
INVESTORS ARE THE SAME ISSUES
THAT NEED REFORM
Source: Frost & Sullivan
KEY INDUSTRY
CHALLENGES
2010-2015
US INTEREST – POWER AFRICA INITIATIVE
MOBILIZING PARTNERSHIPS & INVESTMENTS IN ENERGY
PRIVATE SECTOR LED MODEL
“TOOLBOX” APPROACH
RESOURCES AND TOOLS TO ADVANCE KEY PROJECTS ON THE NATIONAL GRID
TECH ASSISTANCE, TECH ADVICE, REGULATORY REFORM, & FINANCIAL RESOURCES
SUSTAINABLE ENERGY DEVELOPMENT
COMMITMENTS
$20B FROM PRIVATE SECTOR FOR NEW ON-&OFF-GRID PROJECTS TO SSA
$7B IN FINANCIAL SUPPORT, LOAN GUARANTEES, AND TECHNICAL SUPPORT
INTERNATIONAL POWER AFRICA FUNDING
$9B AfDB, WB, AND SIDA
2008-2013 15 TO 24% ACCESS
WHAT DOES POWER AFRICA INITIATIVE MEAN FOR TANZANIA?
TRANSACTION ASSISTANCE FOR GENERATION PROJECTS
TECHNICAL ADVICE
PRIVATE SECTOR INVESTMENT AND KEY
INSTITUTION CAPACITY BUILDING
TECH TRANSFER
GE TURBINES FOR 150MW KINYEREZ I
GAS-FIRED THERMAL PLANT
PORTABLE LOAN FOR SMALL HYDRO PROJECTS
PROMOTE ENERGY DIVERSIFICATION
RENEWABLE ENERGY FEED-IN TARIFFS
IMPROVED POWER PURCHASE AGREEMENT FOR RENEWABLE ENERGY PROJECTS
IMPROVE ENERGY SECTOR VIABILITY
ASSIST TANESCO WITH LOAD MANAGEMENT
STRATEGIES & REDUCE LOSSES
LIMIT EMERGENCY POWER PLANT GENERATION
US INTEREST – MCC COMPACT I
IMPROVE ELECTRICITY SERVICE AND COVERAGE
NEW POWER GENERATION, TRANSMISSION AND DISTRIBUTION CAPACITY
REINFORCEMENT OF THE EXISTING NETWORK
INCREASE INVESTMENT AND ECONOMIC ACTIVITY TO
BUSINESSES AND COMMUNITIES
INITIAL ACCESS/CONNECTION TO ELECTRICITY
SUBMARINE ELECTRIC TRANSMISSION CABLE FROM
THE MAINLAND TO ZANZIBAR
EXTEND AND REHABILITATE THE DISTRIBUTION NETWORK AND
INFRASTRUCTURE
LINE EXTENSIONS TO UNSERVED AREAS IN SIX REGIONS
RESULTS
INVESTMENT AND COOPERATION FROM
10 US COMPANIES IN ENERGY SECTOR
$698M FROM 2008-2013 ON 3 PROJECTS
ENERGY, TRANSPORT, AND WATER SECTORS
US INTEREST – MCC THRESHOLD PROGRAM
$11.2M GRANT
RESULTS
TANZANIA PUBLIC PROCUREMENT REGULATORY AUTHORITY AUDIT
39 PROCURING ENTITIES
1 IRREGULARITY UNCOVERED
NATIONAL ELECTRICITY PURVEYOR
IMPROVED TRANSPARENCY
STRENGTHENED ANTI-CORRUPTION REGULATION
RESIGNATION OF SENIOR GOVERNMENT
OFFICIALS & PRIME MINISTER
CHINA INTEREST – DEVELOPMENT MODEL
CHINA DEVELOPMENT MODEL
ECONOMIC GROWTH OVERSEEN BY A DISCIPLINED, ONE-PARTY TOTALITARIAN STATE
WITH FULL AUTHORITY, IF NOT CONTROL, OVER ALL ASPECTS OF ECONOMIC
ACTIVITY
NON-INTERFERENCE AND LIMITED CAPACITY TO PARTICIPATE IN GLOBAL ENERGY
POLITICS
CHINESE BIT POLICY SIMILAR TO OECD COUNTRIES AND POTENTIALLY MORE COOPERATIVE
ON AN INTERNATIONAL LEVEL
INVESTOR’S RIGHTS AND INTERNATIONAL ARBITRATION
BUT….
TRANSACTIONS LACK TRANSPARENCY
TRADE FOR RESOURCES AT LOW COMMODITY PRICES LIMITING NEW DEALS
DEVELOPING EXPORT CAPABILITIES VS DOMESTIC CAPABILITIES
WHAT HAS CHINA BROUGHT TO THE GAME?
INVESTMENT & HUMAN CAPITAL –
500 CHINESE COMPANIES
CREATED 150,000 JOBS,
552 TIC APPROVED PROJECTS
CORPORATE SOCIAL RESPONSIBILITY
PROGRAMS
PASSIVE PUBLIC RELATIONS AND
EDUCATION CAMPAIGN
RESOURCE-BACKED LOANS
INFRASTRUCTURE DEVELOPMENT
DOMESTIC & EXPORT POTENTIAL WITH A PITFALL
NATURAL GAS PIPELINE PROJECT
$1.2B 523KM PIPELINE FROM MTWARA TO DAR ES SALAAM
INCREASE POWER GENERATION TO 3000MW
LOWER ELECTRICITY PRICES
ENCOURAGE FUEL SWITCHING
LESS EXPENSIVE GAS-POWERED
REDUCE RELIANCE ON EPP (DIESEL FIRED)
THE PITFALL
SOCIAL CONFLICT
LACK OF INFO & COMMUNICATION
DISPLACEMENT WITHOUT
RELOCATION OR COMPENSATION
FOREIGN DIRECT INVESTMENT, NET INFLOWS (% OF GDP)
Total FDI net inflows –
2004 1.8% GDP
2013 4.3% GDP
US FDI –
2012 $319m USD
2015 est $588m USD
China FDI –
2014 $4b (2014) Bagamoyo Port
Project and infrastructure
SOURCE: “The U.S. Spends $35 Billion Helping Out The World… But Where Does All this Money Really Go?” 28 October 2015, http://howmuch.net/
THE GOOD/BAD NEWS OF US & CHINA INTEREST
GOOD
ENERGY DIVERSIFICATION
INFRASTRUCTURE & INSTITUTIONAL ASSISTANCE
PIPELINES, PORT FACILITY, FINANCIAL & TECH ASSISTANCE
ENERGY & PUBLIC SECTOR REFORM ASSISTANCE
REVISED NAT’L ENERGY STRATEGY, PWR SYS MASTER PLAN, NG POLICY,
INCREASED PRIVATE INVESTMENT
PPP ACT, TZ INVESTMENT CENTRE
COMPLEMENTARY APPROACHES (KIND OF)
BAD
CONTRADICTORY TRANSPARENCY STANDARDS
LACK OF PUBLIC EDUCATION OF NECESSITY FOR ENERGY SECTOR IMPROVEMENTS
POLITICAL CONFLICT BETWEEN MAINLAND AND ZANZIBAR
CORRUPTION DESPITE INCREASED ANTI-CORRUPTION INITIATIVES
SHORT-TERM INVESTMENT OUTWEIGHS MEDIUM TO LONG-TERM OBJECTIVES
GROWTH RATE – 7.2% CONT INCREASE SINCE 2010 4.8%
PER CAPITA - $2700
BY SECTOR: AG – 26.9% (80% OF LABOR FORCE)
IND – 25.2%
SVC – 48%
EXTRACTIVE REVENUE ~10% OF TOTAL REVENUE
ON-SHORE NATURAL
GAS PRODUCTION
OFF-SHORE NATURAL GAS DISCOVERED
HOW IS TANZANIA MOVING AHEAD?
SENIOR LEVEL RESTRUCTURING FOLLOWING ENERGY SECTOR SCANDAL (LATE 2014)
RESIGNATION & INVESTIGATION OF PRIME MINISTER, ATTORNEY GENERAL,
MINISTER OF ENERGY AND MINING, HOUSING MINISTER
DIRECT ECONOMIC ASSISTANCE SUSPENDED
IEA & EITI COMPLIANT STATUS SUSPENDED
BIG RESULTS NOW INITIATIVE – TZ INITIATIVE BASED ON MALAYSIA DEVELOPMENT MODEL
PRIORITIES: ENERGY AND NATURAL GAS
AGRICULTURE
WATER
EDUCATION
TRANSPORT
MOBILIZATION OF RESOURCES
CONCERN OVER UNFAIR INTERNATIONAL ENIVRONMENTAL STANDARDS HINDERING
INDUSTRIALIZATION
TRILEMMA TREND
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