The document provides an overview of small power producers (SPPs) in Tanzania. It discusses Tanzania's SPP regulatory framework, including goals, required permissions and approval processes. It also outlines the current SPP situation in Tanzania, noting some successes with power purchase agreements and generators in the pipeline, but also challenges around tariffs, land rights, and utility interest. The conclusion emphasizes that renewable energy is important for Tanzania but policy barriers including low tariffs have stalled development of renewable projects, and SPPs could help fill gaps in electrification.

1. Overview of Small Power Producers
(SPPs) in Tanzania
Renewable Energy Workshop
TAREA
6th June, 2012
Eng. Anastas P. Mbawala
Director of Electricity
Energy and Water Utilities Regulatory Authority (EWURA),
Tanzania
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2. Outline
 Small Power Producer (SPP) – examples
 Overview of Tanzania SPP regulations
 Tanzania Legislative Framework
 Goals,
 Standardized Framework / Table of SPP documents
 Tariff Issues
 Main grid, mini grid, wholesale and retail sales
 Calculation process and Levels
 Required permissions and approvals, procedures for
application; process rules
 Current situation: successes and challenges
 PPAs, generators in the pipeline
 Challenges
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4. Tanzania SPP Legislative Framework
 National Energy Policy, 2003
 Policy Statement No. 36
 Energy and Water Utilities Regulatory Authority
Act
 Establishing EWURA,
 Emphasis on Rural services, §6(d)
 Rural Energy Act (2005)
 Establishing REA & REF
 The Electricity Act, 2008
 Defines SPPA & SPPT 4

5. SPP Framework Documents
Main grid Mini-grid
Standardized Standardized Power Purchase Standardized Power Purchase
PPA Agreement for Purchase of Grid- Agreement for Purchase of Off-Grid
Connected Capacity and Associated Capacity and Associated Electric
Electric Energy Between Buyer and a Energy Between Buyer and a Small
Small Power Project Power Project
Tariff Standardized Tariff Methodology for Standardized Tariff Methodology for
methodology the sale of Electricity to the Main Grid the Sale of Electricity to the Mini-grids
in Tanzania Under the Standardized Under the Standardized Small Power
Small Power Purchase Agreements. Purchase Agreements
Process
Guidelines for Developers of Small Power Projects (SPP) in Tanzania;
Guidelines
• Includes standardized forms
(roadmap)
Process rules Rules for Developers of Small Power Projects (SPP) in Tanzania
Interconnection Guidelines for Grid Interconnection of Small Power Projects in Tanzania
Guidelines (Parts A, B, C)
Interconnection
◊ Rules for Grid Interconnection of Small Power Projects (Not Yet provided)
rules
Annual Tariff Detailed Tariff Calculations under the Detailed Tariff Calculations under the
calculations SPPA for the Main Grid for each year SPPA for the Mini-grids for each year

6. Salient Features
 Small Power Purchase Agreement (SPPA)
 A Must Take Plant
 Term – 15 years
 Seller may opt to join electricity trading / sell retail
 Isolated SPPA switches to Main grid SPPA upon
interconnection with main grid
 Standardized Tariff Methodology
 Avoided Costs of the Utility
 Technology Neutral
 Floor and Cap Prices
 Calculated Annually / Reflect Seasonality (Main Grid)
 Local Currency Denomination
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 Adjustment for Transmission Losses

7. Annual Feed-in-Tariff Levels
2008 2009 2010 2011 2011
GRID 100 96.11 110 121 152.54
TZS/kWh
Mid Yr
Rate
(TZS/$) 1176.99 1321.69 1393.82 1598.39
US$/kWh 0.085 0.073 0.079 0.076
ISOLA N/A 334.8 369 380 480.50
TED TZS/kWh
Mid Yr
Rate
(TZS/$) 1176.99 1321.69 1393.82 1598.39
US$/kWh N/A 0.253 0.265 0.238 7

8. Necessary permits, clearances and procedures for application
Land title or lease
Resource Rights (e.g. water rights from River Basin Water Office)
Letter of Intent (LOI)
Sequence is
important to
Business license, tax registration, etc. avoid
competing
claims on
Building Permit project sites
Environmental and Social Clearance (NEMC)
Power Purchase Agreement (PPA)
EWURA licence
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9. SPPs In Operation
Project MW Type of Status
Resource
ACRA Tanzania 0.3 Hydro In Operation / Community based
— Main grid
TANWAT 2.34 Biomass -wood Selling 1 MW (2010)-Main Grid
TPC Co-Generation 15 Baggasse Contracted to Sell 9 MWe to
TANESCO — Main grid
Katani Power Plant 0.3 Biomass - In Operation – Pilot, not
Waste connected to network—Isolated
mini-grid
Chipole St. Agnes 0.4 Hydro Mini-Hydro for own use but can
Convent be expanded to supply
surrounding villages

10. SPPs in Preparation
Project MW Resource Status
Sao Hill Energy 15 Biomass Provisional Licence (Grid)
Chipole – Own use & sell 3-5 Hydro additional 3MW on new site
to the grid planned (off-grid)
Mwenga 3.36 Hydro PPA Signed with TANESCO (off-
grid)
Ngombeni Mafia 1.4 Biomass PPA Signed with TANESCO.
Under construction (off-grid)
Kilombero Sugar Co. 10.6 Bagasse Applied Licence (Grid)
Tanzania Sisal Board 0.5+ Biogas Applied Licence intends to roll out
in several sisal plantations
Kitonga Mini Hydro 10 Hydro Applied Licence, may increase
capacity (Grid)
Andoya Hydro Electric Co. 0.5 Hydro Provisional Licence (Off-grid)
Kilocha Hydro 12 Hydro In discussion with REA (Grid)
Kilombero Mngeta 3 Hydro In discussion with REA (Grid)

11. Challenges
Challenge Response
n Lack of Renewable Energy 1. Government needs to set
Policy clear policy with targets, etc.
n Inadequate financial 2. WB has established a loan
resources to support the guarantee facility, engage
initiative interest of other financial
institutions
n Inadequate private sector 3. Conducive Environment, rules
participation in investment and publicize
n High interest rates loans
5. Promote other sources mix
from commercial banks
grant and loans
n Land ownership and water n Include land ownership &
rights for SPPs projects water rights in RE Policy
especially wind farms &
mini-hydro plants

12. Challenges …..cont. 2
Challenge Response
1. Low, non-cost reflective tariffs
n Government has directed
& depreciating Currency, EWURA develop technology
specific FiTs. But who will pay
the premium?
4. Lack of experience of key n Capacity building (REA)
project promoters with skills in
project management
5. Lack of interest on the part of n Improving through regular
potential Off-takers discussions with utility
(TANESCO)
n Introduce technology specific
7. Isolated Grid SPPA changing FiT to some types or maintain
into Main Grid SPPA upon the higher off-grid FiT
interconnection

13. Conclusion
 Renewable Energy Sources are important in
Tanzania
 Lack of Renewable Energy Policy stalls the
development of RE Projects
 Non Reflective Tariff /FiT is one of the Key
barriers to initiating RE Projects
 Small Power Projects can feel the Gap
between projects, and a better solution for
rural electrification
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14. 2nd Generation SPP Rules
 Edition 2012
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15. Thank You
For more information
Visit website
www.ewura.go.tz