Tanzania earmarks $967m for energy expansion, boosts power, gas projects

Tanzania has proposed about $967.3m for its energy sector in the 2026/2027 financial year, with the bulk of the funding targeted at development projects across electricity generation, transmission, natural gas and fuel supply.

According to a statement made available to PUNCH Online on Thursday, Energy Minister, Deogratius Ndejembi, told parliament that the Ministry of Energy and its agencies were seeking approval for a total budget of $967.3m, of which $943.2m is earmarked for development spending and $24.1m for recurrent expenditure.

He said $613.8m would come from domestic sources, while $329.4m would be sourced externally.

According to him, the investment reflects government efforts to expand energy infrastructure and support industrial growth and service delivery.

Ndejembi said installed electricity generation capacity rose to 4,522.54 megawatts in March 2026, compared to 4,031.71 megawatts a year earlier, while peak demand increased to 2,199.06 megawatts.

He also noted expansion in transmission and distribution networks, with transmission lines growing to 8,500.38 kilometres from 7,809.67 kilometres, and distribution lines rising to 240,229.56 kilometres from 200,266.25 kilometres.

“Electricity access climbed to 85.5%, up from an average of 78.4% in 2020, while the share of Tanzanians connected to power rose to 52.1% from 37.7%.

“The government is targeting 8.3 million new customer connections by 2030, which would lift connectivity to 75%,” the statement added.

Ndejembi said Tanzania would continue operating the 2,115MW Julius Nyerere Hydropower Project, while advancing other generation projects, including solar and hydro schemes across several regions.

He also disclosed ongoing transmission projects such as the 400kV Chalinze–Dodoma line and the Iringa–Sumbawanga line, alongside other national grid expansion works.

On rural electrification, he said all 64,359 hamlets on the mainland are expected to be connected by 2030, with ongoing projects already covering tens of thousands of communities.

The government is also expanding compressed natural gas infrastructure, with CNG stations increasing from nine to 18, while additional facilities are being rolled out for vehicle conversion and distribution.

Tanzania is also developing its gas sector, with output from Songo Songo and Mnazi Bay reaching 41,530.94 million cubic feet, while new projects in Ntorya are expected to boost production significantly.

The government said it has also secured petroleum supplies for the coming months while expanding strategic storage capacity, including a reserve facility in Kigamboni.