Natural gas promises cheaper electrification

The World Bank announced its approval of the Songo Songo Gas Development and Power Generation Project on Wednesday, 10 October, and is to back the project with an interest-free credit.

It will give Tanzania a $183 million credit for the project, which aims to take natural gas from the Songo Songo field (in Kilwa District, off the east coast) to the capital, Dar es Salaam, to be used for power generation.

The Bank said its involvement was intended to catalyse foreign private investment to develop Tanzania's natural gas reserves, in order to produce least-cost power generation for domestic and industrial use in a sustainable manner.

The project involves the development of a gas gathering system at Songo Songo Island, the construction of a 25 km marine pipeline and a 217 km land pipeline to Dar es Salaam and the nearby Wazo Hill. The gas will be transported to an existing thermal power station, which will be converted to a gas-firing facility and privatised.

Tanzania, one of the poorest countries in the world (with GDP per capita per year of $250), is heavily dependent on agriculture but, with industry representing 15 percent of GDP and services (particularly tourism) growing fast, it has a growing need of more reliable and sustainable power sources.

Only 7 percent of people in Tanzania currently have access to electricity and half of all electricity is consumed in the capital, Dar es Salaam; most Tanzanians still depend on wood and charcoal, the World Bank stated.

It is hoped that the Songo Songo project will reduce Tanzania's dependence on imported oil for electricity generation and provide an alternative, lower-cost and more reliable power source.

[For details, go to: http://www4.worldbank.org/sprojects/Project.asp?pid=P002797]

Among its other aims, the project is intended to increase poor people's access to electricity through viable, sustainable rural energy schemes.