TZ First Power and Gas Sector DPO

closed

Over the last several years, Tanzania has witnessed a growing power generation deficit caused by: (a) the below-average hydrology conditions that have reduced hydropower generation capacity; and (b) insufficient development of new generation capacity relative to the growing demand for electricity. The Government of Tanzania (GoT) has begun to implement a strategy to place the power sector on a more sustainable path. The discovery of important offshore natural gas reserves presents Tanzania with a potentially transformational opportunity for the country. The Government is determined to, and has started the process of, implementing an appropriate policy framework for the optimal use of future natural gas revenues. A programmatic approach is being proposed to support the Government in addressing the above challenges. The operation is consistent with the objectives of the Country Assistance Strategy (CAS) for FY12-15 and the Africa regional strategy. The development objective of the program is to: (i) strengthen the country's ability to bridge the financial gap in its power sector; (ii) reduce the cost of power supply and to promote private sector participation in the power sector; and (iii) to strengthen the policy and institutional framework for the management of the country's natural gas resources.