Electricity Supply Industry Reform Strategy and Roadmap

1. Electricity Supply Industry Reform Strategy and Roadmap Prepared by MEM June, 2014

2. Outline • Tanzania Development Vision 2025 • Drivers for ESI Reform • ESI Reform Objectives • ESI Reform Strategy &Roadmap • Resources Requirement • Way Forward • Conclusion

3. Tanzania Development Vision 2025 Middle Income Country • Raise GDP per Capita from USD 640 to USD at least USD 3,000; • Increase Generation Capacity from 1,583 MW to at least 10,000 MW by 2025; and • Increase electricity connection level from 24% to at least 50% by 2025. • Economic growth low cost and reliable power Investment Gx, Tx and Dx;

4. Tanzania Development Vision 2025

5. Drivers for ESI Reforms

6. DRIVERS OF ESI REFORMS Policy and legal requirement: NEP, 2003 and Sec 40 of the Electricity Act, 2008 calls ESI reforms. Financing Requirement: Between 2012 – 2017 about USD 11.4 billion – about USD 1.9 billion per annum required. Security of Supply: Diversify Power Generation and effectively participate in EAPP and SAPP Stakeholders’ Expectation: Customers, GoT and business partners

7. DRIVERS Cont’d Connection and Access levels to Electricity Supply: Connection level targets: 30% (2015), 50% (2025) and 75% (2033). Demographics &Demand Projections: Electricity demand growth rate: 10% and 15% Population to increase from 45 million to 69.5 million. GDP per capita to increase from USD 640 to at least USD 3,000 Almost 10,000 MW will be required to propel the economy.

8. ESI REFORM OBJECTIVES • Main: To improve ESI governance and performance for quality service Delivery. • SpecificObjectives: • Create ESI to support the National Development Agenda Roadmap & Indicative Budget • Establish efficient ESI in environmentally sound and sustainable manner • Promote financial and commercial viability of the Sector • Attract private investment to the sector • Ensure adequate, reliable, affordable and accessible electricity supply

9. REFORM STRATEGY Gradual unbundling of Gx, Tx and Dx REA current set to be maintained with its functions complementing Semi- autonomous Zonal Offices

10. REFORM ROADMAP Guide the implementation of the ESI Reform Process

11. REFORM ROADMAP • Immediate term (July 2014 – June 2015) • Short term ((July 2015 – June 2018) • Medium Term (July 2018 – June 20121) • Long term (July 2021 – June 2025)

12. Summary of Key Activities of the Reform Roadmap

13. The Roadmap – Immediate ActionsJuly 2014 – June 2015

14. The Roadmap – Short Term (Jul 2015 - Jun 2018)

15. The Roadmap – Medium Term (Jul 2018 - Jun 2021)

16. The Roadmap – Long Term (Jul 2021 – Jun 2025)

17. The Roadmap – Long Term (Jul 2021 – Jun 2025)

18. Electricity Supply Industry Reform Status and Way Forward

19. Key Risks of ESI Reforms

20. RESOURCES REQUIREMENT • Human Resource: New Skills to marshal the reforms implementation will required. • Financial Resource: To implement the reforms USD 1.15 billion will be required to facilitate studies, human capital development and TANESCO Balance Sheet clean up. • New Companies to start with clean balance sheet • Funds is expected to be contributed by GoT and Partners and TANESCO

21. Conclusion - Expectations

22. WAY FORWARD • Submission to Cabinet Secretariat for comments by 13 June, 2014 • Submission to Permanent Secretaries meeting by 20 June, 2014 • Submission to the Cabinet by 27 June, 2014 Publication of the ESI Strategy and Roadmap by 30 June, 2014

23. Conclusion - Expectations Reforms is essentially a process rather than a one time event, the Roadmap shall be reviewed from time to time There is no one size fits all reform model, the proposed reform strategy is tailored to Tanzanian ESI needs Concerted efforts from all stakeholders are required to make the reform a success

24. Conclusion - Expectations THANK YOU!