The electricity sector in Tanzania is dominated by the Tanzania Electric Supply Company Limited (TANESCO) in a vertically integrated structure carrying out generation, transmission, distribution and supply. TANESCO operates the grid system and isolated supply systems in Kagera, Kigoma, Rukwa, Ruvuma, Mtwara and Lindi. Due to slow development in the sector and the general global trend in the electricity supply industry, the government in 1992 through the National Energy Policy, lifted the monopoly by the public utility to allow involvement of the private sector in the electricity industry. This major policy reform enabled Independent Power Producers (IPPs) to operate in the generation segment. Private players include the Independent Power Tanzania Limited – IPTL (100MW), Songas (190MW) and Artumas Inc. operating a gas to power scheme in Mtwara and Lindi regions (18MW). Others are the leased emergency plants namely Aggreko (40MW), Dowans (100MW) and Alstom (40MW). Further, interconnections with Zambia and Uganda enable imports of relatively small amounts of electricity.

The generation capacity was on a 60:40 hydro/thermal proportion before 2005. Following introduction and expanded use of natural gas usage in power generation, the hydro-thermal mix is now standing at 51:49 (including the emergency plants).

The installed capacity is currently at 1095MW including 180MW from temporary sources. Private capacity account for 480MW (44%) including the temporary sources. Another 100MW capacity that may come on line by the end 2007 is under construction by TANESCO. The network consists of a total of 2624 km of 220 kV, 1442 km of 132 kV, and 486 km of 66 kV transmission line. The electricity is supplied to consumers at 33kV, 11 kV and 415/230 V. The Maximum demand of electricity on the TANESCO grid system recorded in May 2007 was 607MW.

With about 660,000 customers, electricity was available to only about 11% of the population by first quarter of 2007, with more than 80% supplied in the urban areas. Efforts are being made to increase access in rural areas, and the Rural Energy Agency has been established to oversee the implementation of rural electrification projects, using Rural Energy Fund as provided in the Rural Energy Act, Cap 131