Solar energy investments in Tanzania are still at a small scale and have a big potential for new players. To date, about 6 MW of Photovoltaic (PV) solar energy have been installed in Tanzania.

In 2019, the World Bank (WB) signed a grant agreement with the Government of Tanzania amounting to USD 4.5 million to finance access to a sustainable water supply through improved solar pumping systems in 165 rural Tanzanian villages.

The industry continues to develop with several projects and companies reaching milestones. Construction of 11 solar mini-grids is underway on a cluster of islands in Lake Victoria as part of the first phase of an ambitious 200 MW rural electrification project.

The Government looking to attract bigger players and show its support for solar development within the country by removing VAT and import taxes on the main solar components such as panels, batteries, inverters and regulators.

Tanzania has areas of high wind potential that cover more than 10% of its land or an area equivalent to Malawi’s size with a potential greater than that of the US State of California.

The World Bank undertook the Energy Sector Management Assistance Program (ESMAP) to construct an energy map by using satellite images and so far has invested USD 2.8 million in the country.

Tanzania accounts for most of the wind power projects installed in Sub-Saharan Africa (SSA), which represents 22% of the total 647 MW installed out of 14,700 MW of large-scale RE power projects in the development stage in SSA since 2013.

In Tanzania, only 38% of the population has access to electricity. With this and further renewable energy projects, the country expects to raise the access to 50% by 2025 and 70% by 2035.

Tanzania's hydropower capacity stands at 562 MW and estimates of potential capacity are as high as 4.7 GW. Most of the hydropower water sources in Tanzania are rivers.

There are planned large hydro projects at Ruhudji (360 MW), Rumakali (222 MW), and Siegler's Gorge (2,100 MW).

Small HydroPower (smaller than 10 MW) so far has been only exploited up to 8 MW by Tanzania Electric Supply Company Limited (TANESCO) and private developers, whereas potential is estimated at 315 MW, and interest seems to be increasing.

The aim is to supply power to the national grid and through mini-grids to villages in the community.

The 222 MW Rumakali and 358 MW Rhuhudji projects are both located in the Njombe region in the southern highlands of Tanzania and could double the country’s total installed hydropower capacity from 562 MW to 1,142 MW.

In May 2021, the African Development Bank (AfDB) and the Government of Tanzania signed loan agreements totaling USD 140 million to finance the construction of the 50 MW Malagarasi hydropower plant in Western Tanzania.

The funds will be used to construct the plant and an evacuation transmission line, as well as to add 4,250 rural electrification connections, providing reliable renewable energy to households, schools, clinics and small and medium-sized enterprises in the Kigoma Region.

Tanzania has proven natural gas reserves of 57 trillion cubic feet, with at least 49.5 trillion cubic feet of those reserves are offshore in the Indian Ocean, enough to cover the country’s domestic use and make Tanzania the next natural gas hub in Africa.

Natural gas deposits in Tanzania are found at Songo Songo in Lindi region, Mnazi bay in Mtwara Region, Mkuranga in Coast Region and on the Zanzibar islands coasts.

The reserves at Songo Songo and Mnazi bay are estimated at 30 and 15 billion m³ respectively.

A 232 km gas pipeline from Songo Songo Island to Dar es salaam has been constructed and is supplying natural gas for power generation and other industrial thermal processes.

There are nine thermal power plants in Tanzania converting natural gas to electricity: Ubungo I and II, Tegeta, Songas, Mtwara, Somanga, Kinyerezi I and II, and Dangote.

Total production per year stands at approximately 650 MW.

The Songas Project is currently producing around 200 MW of electricity using natural gas.

Some of the Dar es Salaam-based industries using Natural Gas for thermal applications include Cement factories, Textiles, Breweries, and Glass and Aluminum industries among others.