This power point presentation explains resilience and inclusion issues associated with Infrastructure Governance Framework for Electricity Production and Distribution of Independent Power Producers in Tanzania

1. Resilience and Inclusion Issues Associated with
Infrastructure Governance Framework of Independent
Power Production and Distribution in Tanzania
E. Massawe

2. Introduction
• Electricity production in Tanzania is governed by the Tanzania
Electric Supply Company Limited (TANESCO).
• Though it is a company, it is operated as a parastatal
organization.
• It is a quasi - autonomous body.

3. Mandates/Functions
• TANESCO oversees the generation, purchase, transmission and
distribution of electricity in Mainland Tanzania.
• It produces electricity through gas powered generators and
hydro-power plants.
• It also engages Independent Power Producers (IPP) to produce
electricity.
• It engages IPP through competitive public procurement.

4. Infrastructure
• Its infrastructure crisscross many parts of urban and rural areas.
• This infrastructure is in the form of a national grid (network).
• A network of high voltage and low voltage transmission lines
which distributes electricity countrywide.

5. Production/Dissemination
• TANESCO produces electricity,
and engages IPP to supplement
electricity production needs.
• IPP load electricity on the
national grid once they produce
it.
• Production and distribution of
electricity is wholly monopolized
by TANESCO.

6. Private Sector/Citizens Participation
• It is realized through the following channels: -
IPP engagement in electricity production.
Private companies’ supply of electricity poles.
Engineering and Construction companies for engineering works.
Outsourcing of legal services.
Consultancy firms.
• Citizens are involved during consumer consultative meetings
(through EWURA) when tariffs are reviewed. This is ex-post
involvement.
• Hardly citizens are involved during IPP engagement process.

7. Infrastructure Governance
• Strong infrastructure governance in all stages of infrastructure
investment is key to ensure sustainable economic growth.
• Institutions with stronger infrastructure governance
frameworks have efficient, predictable, credible, and productive
investments.
• Institutions with weak infrastructure governance can lead to
unproductive projects that can reduce the growth dividend
from public investment.

8. Resilience
• Pertaining to safeguarding development, mitigation, and adapt
to a wide range of risks and uncertainties, including recessions,
financial shocks, natural hazards, climate change and disease
pandemic.
• Institutions (such as TANESCO) can avoid diverting scarce
financial resources to repeated cycles of shock, restructuring,
and rebuilding.
• Investment on resilience is cost-effective and yield high
economic returns.
• Thus, in Richmond project, resilience could not be considered.

9. Inclusion
• Regards involvement of all social groups in the undertaking,
operations and maintenance of the infrastructure project.
• Presence of inequality and the exclusion of social groups from
services, investment projects and opportunities impedes their
participation in the economy.
• Including diverse perspectives in designing and monitoring of
public sector investment projects can improve accountability
and enhance delivery.

10. Salient Features
• Institutions with weak governance can lead to the selection of
unsustainable and low-priority projects that would endanger
macro-level debt sustainability.
• Between 2005 - 2010, there was dry spell in Tanzania. Water in
hydro-power dams decreased.
• Power rationing was looming because electricity production
from dams decreased.
• Hiring of IPP to supplement electricity production deficit was
wanting.

11. Salient Features
• Richmond was engaged as IPP to produce 100 Megawatt - to
supplement the deficit.
• The IPP procurement was marred with governance shortfalls
and interference from the central government.
• Autonomy in conducting public procurement was vitiated.
• As a result, Richmond was engaged but had no capacity to
produce the needed electricity.
• Power rationing and power outages became an order of the day.
• This is the outcome of weak governance, that led to the selection
of unsustainable investment project.

12. Salient Features
• For a period of 5 years, Richmond could not produce even one
megawatt of electricity.
• It sold its infrastructure to DOWANS which struggled to
produce the needed electricity.
• Here, issues of openness, transparency in procurement and
accountability surfaces.
• Issues pertaining to infrastructure resilience, inclusion, value for
money and economic efficiency were disregarded.
• Nonetheless, infrastructure governance principles were not
adhered.

13. Institutional Framework
• It is made up of the following actors: -
The Ministry of Energy - overall in charge with policy issues.
TANESCO - in charge with technical, legal, engineering and construction.
EWURA (Energy and Water Utilities Regulatory Authority) - regulator.
REA (Rural Energy Agency) - in charge with rural electrification.
IPP (Independent Power Producers).
Consumers.
• All the above actors need to be involved in infrastructure
project preparation, undertaking, operation and maintenance
throughout its life cycle.

14. Conclusion
• Needless to say that strong governance is very crucial for
infrastructure project during its all stages of development,
undertaking, operation and maintenance throughout its life
cycle.
• When developing an infrastructure governance framework
institutions should consider and factor in, resilience and
inclusion aspects.