Tanzania 2015 | ENERGY | INTERVIEW

TBY talks to Eng. Felchesmi J. Mramba, Managing Director of Tanzania Electric Supply Company (TANESCO), on the sector's restructuring process and new discoveries.

Eng. Felchesmi J. Mramba
Felchesmi J. Mramba is the Managing Director of Tanzania Electric Supply Company (TANESCO).

What is the current focus of TANESCO's restructuring process?

The restructuring of Tanzania Electrical Supply Company (TANESCO) is ongoing and taking place in two phases. The first phase consists of what we call the TANESCO Internal Reforms. We are focusing on four key areas here. These reforms will bring improvements to our operational performance, while another area of focus will bring improvements in business, especially business growth. The third area will improve customer service. Finally, we are also implementing reforms that will improve upon the effectiveness of our human resources. In the first area, which focuses on improving organizational performance, we are looking at areas such as procurement, where we want to restructure functions and create specialized sections in the procurement pool. The first section will be dealing with generation and transmission procurements. Another section will be the distribution procurements. The third one will deal with general procurements and the fourth will oversee the procurement of major projects and consultancies. We are also planning to decentralize procurement, with most being done from regional zones. The head office will only deal with a few high cost, or specialized procurements. We also want to decentralize the business in terms of balance sheets and P&L accounts, so that each region acts as a profit center, with its own balance sheet, and its own profit and loss account. We are also investing in ICT to support the business. Our expectation is to see improved revenues, customer service, as well as stake-holder and customer relations, and to improve our public image. That is our number one priority. Second in importance is the reform being pioneered by the government, which encompasses the whole sector and not merely TANESCO. We are highly involved in this, as TANESCO accounts for almost 80% of the sector. Therefore, reforming the sector by definition means reforming TANESCO.

What role will the private sector have to play for Tanzania to meet its energy demands?

The role of the private sector in the energy sector in terms of TANESCO's business is crucial because neither the government nor TANESCO have sufficient capital to realize all the investments that we are faced with. At the same time, experience shows that private-sector participation goes hand-in-hand with new technology, capital, fresh ideas, and new experiences, which is exactly the case today. We have seen a great deal of interest from the private sector; for example, we have two Chinese companies at Kinyerezi III and Kinyerezi IV. In fact, they are participating as a public-private partnership (PPP). We have a joint venture with CPI and another with Poly Group and both, again, are Chinese companies. We also have a PPP arrangement with Symbion Power, a US company. We have independent power producer (IPP) arrangements with two Tanzanian companies; Kilwa Energy operating in Kilwa, and Kamal Steel operating in Palumbo. These companies operating in the country have already shown great interest, and we know that as we progress many more companies will show interest in working with us.

What will Tanzania's natural gas discoveries mean for the country's power generation?

Today, the key focus is to increase power generation from natural gas. By the end of 2015, we aim for a total capacity of 3,000 MW, predominantly from natural gas. In the long run, we are going to improve on the generation mix; however, our interest for now is to quickly ensure adequate natural gas power generation to reduce cost. Currently, we have idle gas that cannot be utilized because it has no real market. As we expand on power generation and construct the pipeline from Mtwara, we are set to utilize the idle gas in Mtwara. At the same time, we are undertaking significant deep-sea exploration and drilling for gas earmarked for liquefied natural gas (LNG). The amount of natural gas to be used for power generation is small compared to the discoveries.