Thursday, May 17, 2012

Plans ready for 100MW thermal power by 2014

The Citizen Reporters
Dar es Salaam. Tanzania’s energy sector is heading for good tidings, going by the announcement issued yesterday to the effect that the country will start producing geothermal power in the near future. 

Geothermal power refers to electricity that is produced by harnessing internal heat of the earth. Further prospects of more electricity came from the launch of the board of director for a joint venture company, which seeks to produce power from coal as at the Mchuchuma and Liganga fields.

While the geothermal project targets at producing 100MW within the next two years, a foreign company, Tanzania China International Mineral Resources Limited (TCIMR), plans to produce 300MW by the year 2014. Both projects would be implemented in Mbeya Region. While TCIMR is a joint venture between National Development Corporation (NDC) and a Chinese company, Sichuan Hongda, the geothermal project would be carried out by Geothermal Power (Tanzania), a local company.

Information released in Dar es Salaam yesterday said that TCIMR plans to start exploration work after six months. While China Development Bank has provided a $2.4 billion loan for the project, the company itself has made available $600 million, making it the single largest investment venture in East Africa.Geothermal Power (Tanzania) Limited chairman Graeme Robertson told reporters in Dar es Salaam yesterday that the company has initially invested $5 million (about Sh8 billion) for the project.

He said his company has been granted prospecting licences for geothermal exploration in Mbeya Region. Drilling of the geothermal wells would be starting within the next twelve months along the Ngozi volcanic area in the southern highland region.

“Our target is Mbeya because this is a volcanic region, Arusha Region was also fit for such an exploration, but there is a drawback because the larger part of the potential fields is located within game reserves,” he added.
 “Such a geothermal investment will highlight Tanzania’s involvement in sustainable power generation, aiming at eradicating the current shortage of electricity generation,” he stressed.

The company has already embarked on exploration and drilling along the Mbaka and Livingstone faults, which would between them be a source of close to 10 megawatts that would benefit 5,000 villagers around the area.
According to Mr Robertson, the company would also spend $250 million (about Sh400 billion) as total capital cost in generating geothermal energy in Mbeya Region, should the exploration prove to work.

Asked how much in tariffs the company would impose on its customers, Mr Robertson highlighted that his company needed first to do thorough research to establish how deep the site was. Partners in the project include investors from Australia and the Netherlands with 70 per cent worth of shares, Interstate Mining and Minerals Limited with 25 per cent and the National Development Corporation (NDC) with five per cent of the shares.

Geothermal technology has proved to work in Rift Valley areas of Kenya and Ethiopia, and according to Mr Robertson, the technology would be a new and worthwhile undertaking for Tanzania.

For his part, the director of Interstate Mining and Minerals Limited, Mr Henry Nyiti, noted that the technology would be first of its kind in Tanzania since independence. He added that the country was set to benefit immensely at the time when the country is grappling  with punishing power shortages.

Meanwhile, launching the TCIMR board yesterday, the NDC board chairman Chrisant Mzindakaya said the occasion marks the beginning of serious implementation of the coal power project at Mchuchuma and Liganga.
He said equipment for the initial works of feasibility studies as well as exploration have already been shipped to Dar es Salaam.

Dr Mzindakaya said the initial work of evaluating the iron ore and coal would officially start in July this year, after fresh feasibility studies to determine the exact amount of iron ore and coal deposits at the site.
Apart from alleviating power problems, the project would also see Tanzania enter into the global league of coal exporting countries.

Initial projections show that there are about 480 million tonnes of coal at Mchuchuma. The aim is to produce 3 million tonnes of coal annually, part of which would be used to produce 600MW, half of which would be used to run iron ore extraction machines and the other half would be pumped into the national grid.
When fully operational, the Liganga mine would produce 3 million tonnes of iron ore and 1 million tonnes of iron and steel annually.

He said availability of power would encourage several locals to establish small-scale industries that would foster development and generate income for the people. He said that through the lesson acquired from other mining projects, Tanzania shouldn’t repeat mistake at the Mchuchuma project.

In the joint venture, NDC would hold a 20 per cent stake and the Chinese firm would hold the remaining 80 per cent. Dr Mzindakaya said TCIMR would be responsible for raising the $3 billion required for the implementation of the projects in two phases. 
Reported by Mkinga Mkinga and Edward Qorro

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