June 21, 2013 / 8:20 AM / in 6 years

GE signs deal with Tanzania to help build 400MW power plant

NAIROBI, June 21 (Reuters) - General Electric Co and Symbion Power Tanzania have signed a co-operation agreement to develop a 400MW gas-fired power plant in Tanzania, a project that could alleviate power shortages in east Africa’s second largest economy.

Tanzania estimates it has 41.7 trillion cubic feet (tcf) of recoverable natural gas reserves but little of it pumped out, while economic growth remains constrained by chronic energy shortages that result in frequent power blackouts.

The proposed power plant, to be built in southern Tanzania’s Mtwara region, will also include a transmission line to Songea, a city several hundred kilometres away near Lake Malawi.

“Tanzania is growing rapidly and to ensure we have an enabling environment that supports sustainable economic growth, we need to overcome inhibiting challenges such as interrupted power supply. This project will do just that,” John Rice, Vice Chairman and President of GE, said in a statement.

Discoveries offshore of Tanzania and Mozambique waters have led to predictions the region could become the world’s third-largest exporter of natural gas. An expected influx in investment has also caused tensions in both countries.

Mtwara residents last month rioted against the construction of the 532 km (330 mile) pipeline to Dar es Salaam, financed by a Chinese loan, seeking a bigger share of benefits from gas development. At least three people were killed.

It is not known when the Mtwara power plant will be completed or how it will be financed.

Symbion Power Tanzania, a subsidiary of the U.S. power company, already runs a 55MW Diesel Engine Plant in Dodoma, the country’s administrative capital.

The Ministry of Energy and Mineral says that as at end April, the country’s installed electricity capacity stood at 1,438.24 MW, with 35 percent of it coming from natural gas powered plants and the rest from hydroelectric dams and diesel powered plants.

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