* Drought, fuel shortage hits power generation
* Nation faces daily 12-hour electricity cuts
DAR ES SALAAM, June 25 Tanzania's state-run
power company has announced daily 12-hour power cuts for an
unspecified period because of low water levels at hydropower
dams and a shortage of fuel for thermal power generation.
East Africa's second largest economy has been plagued by
frequent power-outages since December.
The International Monetary Fund (IMF) cut its 2011 growth
forecast for Tanzania to 6 percent from 7.2 percent in March,
saying frequent power outages would hurt output while food and
fuel prices could push inflation higher.
The latest round of power cuts caused by a national
shortfall of 200 megawatts (MW) come after a deficit of natural
gas supply in May led to rolling 16-hour power blackouts.
"The Tanzania Electric Supply Company (TANESCO) regrets to
inform its customers ... that it has been forced to extend power
rationing to all regions connected to the national grid,
including Zanzibar," the company said in a statement seen by
Reuters on Saturday.
The utility did not say when the power rationing would end.
TANESCO said water levels at the country's main
hydroelectric dams were almost depleted, leading to a reduction
in power generation.
"By June 22, the water level at Mtera dam was only 690.88
metres above sea level ... the minimum level at the dam, which
will not allow power generation, is 690 metres above sea level,"
said the statement.
Tanzania depends heavily on hydropower for energy and
experiences frequent power shortages during dry seasons.
TANESCO said the government will import heavy fuel oil for a
privately-owned power plant that currently generates just
10-megawatts against its installed capacity of 100 MW.
Dollar demand from oil importers is one of the factors that
helped drive the Tanzanian shilling to a record low
against the dollar this month.
Tanzania has energy demand close to 900 MW capacity, but
produces less than 800 MW.
The government has floated tenders inviting independent
power producers to set up emergency power plants this year to
generate an additional 260 MW of power.
The country's five-year development plan targets generation
of more than 2,700-megawatts by 2015/16.
(Editing by David Clarke and Toby Chopra)
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