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Read Complete Guide →By Dr. Bravious Kahyoza, PhD, Senior Economist at TICGL
As Tanzania’s national debt continues to climb, there has been increasing debate about the sustainability of our borrowing practices and their potential long-term effects on the economy.
The recent figures from the Controller and Auditor General (CAG), which show a significant increase in national debt—from Sh82.25 trillion in 2022/23 to Sh97.35 trillion in 2023/24—are a cause for concern.
However, while these numbers are alarming, the debate should focus not just on the figures themselves, but on sustainable solutions that will address the challenges of financing Tanzania’s development ambitions. One such solution lies in expanding and optimizing public-private partnerships (PPPs).
As the Economist, I have long advocated for the power of strategic partnerships between the public and private sectors as a viable alternative to heavy borrowing.
While Tanzania’s debt remains manageable in comparison to some of our East African neighbors, it is essential to explore ways to reduce our reliance on borrowing, especially for large-scale infrastructure projects.
Public-private partnerships offer a way to share the financial burden and bring in private sector expertise, technology, and efficiency.
This is a path that not only reduces the strain on public finances but also spurs economic growth in a sustainable manner.
Public-Private Partnerships as a Solution
Increasing capital through well-coordinated public-private partnerships can significantly enhance Tanzania's tax capacity, as many of these projects generate revenue.
Take, for example, the Kibaha-Chalinze road project, worth US$340 million, or the US$1 billion ring road construction project currently under way.
These initiatives, which fall under the PPPC’s oversight, demonstrate the power of combining public ambition with private sector efficiency.
By leveraging private sector resources and expertise, we can achieve faster, more cost-effective project delivery and ensure that critical infrastructure is built without overburdening the national treasury.
The fundamental strength of PPPs lies in their ability to mobilize private capital for public goods. When the private sector invests in infrastructure, it helps reduce government expenditure while also improving service delivery.
Projects are completed more efficiently and in shorter timelines, and, crucially, these projects generate ongoing revenue, which in turn supports economic growth.
As we look to the future, Tanzania’s goal of growing its economy from US$85 billion to US$700 billion is ambitious. Achieving this leap requires not just strategic borrowing and taxation but, more importantly, greater involvement of the private sector.
PPPs are the way forward if we are to meet our economic aspirations without falling into the trap of unsustainable borrowing.
The Case for Local Companies in PPPs
One of the key components of a successful PPP framework is the involvement of local companies. While foreign investment is crucial, it is important to prioritize local businesses in these partnerships.
This isn’t just a matter of political favoritism; it’s an economic strategy that benefits Tanzania as a whole. When local businesses are involved, the capital invested circulates within the country, generating a multiplier effect in our economy.
Unlike foreign investors, who often repatriate a significant portion of their earnings, domestic investors reinvest their profits locally, fostering job creation, innovation, and economic resilience.
The government has taken steps to ensure that local companies are given priority in PPP projects, particularly when competing with foreign firms. According to the law, local companies are given preference during project evaluations, not just for political reasons, but because they contribute to building a sustainable economy. When the economy is strengthened by domestic partnerships, we can reduce our dependence on external borrowing and create a more self-sufficient and resilient economy.
Anti-Corruption Measures for Greater Efficiency
A key factor in the success of public-private partnerships is transparency and accountability, which are critical in ensuring that projects are delivered on time, within budget, and without corruption. The fight against corruption is crucial to enhancing efficiency within government institutions.
Recent reports by CAG Charles Kichere highlighted the staggering inefficiencies in some of Tanzania’s parastatals, with a waste of Sh371.42 billion due to poor management and corruption. These losses undermine the effectiveness of our national budget and hamper our ability to invest in critical projects.
The government’s commitment to fighting corruption and improving efficiency will save valuable resources that can be redirected toward funding development initiatives, reducing our reliance on borrowing.
By implementing robust anti-corruption measures, we can ensure that Tanzania’s resources are used more effectively, which, in turn, will increase our capacity to finance projects through public-private partnerships and domestic revenue generation
Tanzania’s national debt is a significant challenge, but it is not an insurmountable one. By tapping into the potential of public-private partnerships, we can unlock new sources of funding, bring in private sector expertise, and build a stronger, more sustainable economy.
However, this must go hand in hand with efforts to combat corruption, prioritize local participation, and ensure that projects are efficiently managed. In this way, we can reduce our reliance on borrowing, build critical infrastructure, and pave the way for a prosperous future.
Insights from Tanzania Investment and Consultant Group Ltd (TICGL)
By Amran Bhuzohera, Economist – TICGL
As Tanzania moves confidently toward its Vision 2050 goals, we stand at a defining moment in our nation’s economic journey. Across the country, the energy for progress is visible — from infrastructure expansion and industrial growth to innovations in agriculture and digital transformation. Yet, unlocking the full potential of these business and investment opportunities requires a clear understanding of our local markets, institutional frameworks, and the dynamics that drive both public and private investment.
At TICGL, this is exactly what we do.
Understanding the Market, Guiding Investment
As an Economist at TICGL, We have seen first-hand how data-driven insights can turn ambitious ideas into sustainable investments. TICGL is more than a consulting firm — we are a bridge between economic knowledge and strategic action. Our work helps investors, policymakers, and entrepreneurs navigate Tanzania’s evolving investment environment with clarity and confidence.
We combine local expertise with global standards to provide our clients with evidence-based analysis, advisory support, and market intelligence. Our mission is simple: to empower decisions that create value, jobs, and long-term growth for Tanzania.
Our Core Focus Areas
At TICGL, our services are designed to serve the entire investment ecosystem:
- Economic and Policy Research: We analyze sectors, markets, and policy trends to provide practical insights that shape investment strategies and public reforms.
- Investment Advisory and Facilitation: We help investors identify viable projects, conduct due diligence, and navigate regulatory processes to ensure smooth market entry and partnership building.
- Public–Private Partnerships (PPPs): We support government agencies, LGAs, and private sector partners in structuring, negotiating, and managing PPP projects aligned with national development priorities.
- Business Consulting and Market Support: We offer advisory services for SMEs and large investors, helping them understand taxation, compliance, and business climate challenges in Tanzania.
Introducing the Tanzania Investment Portfolio
One of our most exciting initiatives is the Tanzania Investment Portfolio (TIP) — a comprehensive compilation of both public and private investment projects, as well as PPP initiatives from across the country.
This portfolio showcases over 100 investment and business opportunities across sectors such as energy, agriculture, tourism, transport, manufacturing, mining, real estate, and technology. It highlights Tanzania’s diverse economic potential and the unique local advantages that make each project both viable and impactful.
More importantly, the TIP is built to help investors understand Tanzania from the inside out — its policies, institutions, and emerging market realities.
Why Tanzania, Why Now
Tanzania’s steady growth, political stability, and demographic momentum make it one of Africa’s most promising investment frontiers. By 2050, with a projected population of over 114 million, our domestic market will be one of the largest in the region.
At TICGL, we believe that informed investment is the key to unlocking this potential — turning opportunities into industries, and industries into livelihoods. Through our research and advisory work, we continue to connect vision with opportunity, and ideas with action.
A Call to Collaborate
We invite investors, development partners, and business leaders to engage with TICGL and explore the Tanzania Investment Portfolio. Together, we can shape an investment environment that is inclusive, data-driven, and globally competitive — one that reflects Tanzania’s growing confidence on the continental and international stage.
Connect with TICGL
📍 Head Office: Dar es Salaam, Tanzania
🌐 Website: www.ticgl.com
📧 Email: economist@ticgl.com
📞 Phone: +255 768 699 002
By Dr. Bravious Felix Kahyoza PhD, FMVA CP3P, Email: braviouskahyoza5@gmail.com
When President Dr. Samia Suluhu Hassan addressed newly sworn-in ministers on November 18, 2025, her message conveyed a rare and urgent frankness. Tanzania, she warned, has entered one of the most fragile economic moments in its recent history. A wave of political unrest following the October general elections has not only shaken domestic confidence but also tarnished the country’s international reputation, so much so that securing external loans or grants has become “extremely difficult.”
The warning would be serious under normal circumstances. However, it occurs at a time when Tanzania is beginning the first five-year phase of implementing Development Vision 2050, a plan whose initial commitments alone will cost nearly TZS 477 trillion, more than four times the investment amount of the previous period. The contradiction is clear: the country is pursuing its most ambitious development program in decades while traditional funding sources are shrinking significantly.
Yet, despite the storm clouds gathering over international credit markets, President Samia framed the challenge with an unexpected confidence, almost a sense of defiant optimism. The Sixth-Phase Government, she noted, has overseen one of the most stable economic recoveries on the continent. GDP growth, which had wavered during the pandemic at 4.5 per cent, rebounded steadily to 5.9 per cent in 2024 and is projected to surpass 6 per cent in 2025.
Inflation has held below 5 per cent for consecutive years, private-sector credit has ticked upward (even if still modest by global standards at around 16–17 per cent of GDP), and the expansion of power generation, particularly through the Julius Nyerere Hydropower Project, has meaningfully altered the country’s industrial landscape.
Those successes, however, rested heavily on the cushion of political calm that Tanzania enjoyed before 2025. And this is where the President’s message sharpened: the country's borrowing space is narrowing just as the cost of development is ballooning.
Public debt now stands between TZS 107 trillion and TZS 115 trillion, roughly 40–48 per cent of GDP. Pushing domestic borrowing higher, she warned, would choke private-sector growth as banks redirect liquidity toward government securities. Raising taxes, in a politically tense climate, risks further instability. As she put it, this is a moment that demands “smart economic thinkers.”
The PPP Lifeline: Tanzania’s Strategic Pivot
Among the strategies the President foregrounded, one stood out unmistakably: Public-Private Partnerships. Unlike traditional borrowing, PPPs distribute risks between the state and investors, and they bring the discipline, efficiency, and innovation of the private sector into the heart of the national development agenda. In the current environment, PPPs are no longer one option among many; they are the most viable route to sustain economic progress without sinking deeper into debt.
Her argument reflected both pragmatism and urgency. If Tanzania is to finance the mega-projects envisioned in Vision 2050, from expressways to energy corridors, ports to industrial parks, it must attract capital that is neither fiscally suffocating nor politically explosive. PPPs offer precisely that escape hatch: a way to maintain the development trajectory while shielding the national balance sheet.
Moreover, PPPs align perfectly with the commitments already embedded in the CCM Manifesto and Vision 2050, which designate them as a central “enabler” of long-term growth. The difference, today, is that what was once framed as an enabler has become a necessity.
Political Reforms and Economic Diplomacy: The Twin Engines
President Samia did not shy away from the political dimension of economic recovery. For years, Tanzanian policy debates toggled between the question of whether political reform must precede economic reform or vice versa. The President dismissed the dichotomy entirely. In a global environment where risk perception shapes the movement of billions of dollars, democratic credibility and economic diplomacy are inseparable.
A country seeking to reclaim its investment-grade rating cannot afford democratic backsliding or a hostile media environment. Investors, lenders, and multilateral institutions increasingly read political signals as economic indicators.
Restoring Tanzania’s image as a predictable and stable state is therefore not simply a matter of governance; it is a prerequisite for capital inflows, concessional lending, and long-term partnerships. This context gives deeper meaning to her call for simultaneous reforms. It is not about political ideology. It is about economic survival.
A New Institution for a New Moment: The National Economic and Social Council
Against this backdrop, the proposal to establish a National Economic and Social Council (NESC) under the Office of the President emerges as a strategically timely idea. Tanzania’s policy landscape has grown too complex, and its economic stakes too high, to operate without a permanent, high-level institution dedicated to consensus building, deep research, and cross-sector coordination.
Such a council would allow the government to craft development strategies grounded in rigorous analysis rather than reactive decision-making. It would bring together economists, business leaders, civil society voices, and international development experts to identify emerging risks, mediate competing interests, and shape policies aligned with Tanzania’s long-term objectives.
Just as importantly, NESC would function as a national think tank tasked with aligning performance metrics, KPIs, OKRs, and broader development indicators, so that mega-projects, whether financed through PPPs or other mechanisms, remain accountable, measurable, and coherent.
Countries that have navigated rapid development successfully, South Korea, Malaysia, and Singapore, have built similar institutions during their transformational decades. Tanzania now faces its equivalent moment.
A Strategic Framework for the 2025–2030 Phase
For Vision 2050’s first implementation phase to succeed, Tanzania must adopt a coherent strategy that binds together PPP financing, diplomatic rebuilding, and political reform. A national PPP commission placed at the heart of government could streamline project selection, reduce preparation times, and attract global partners more effectively. Tightening domestic borrowing, while expanding private-sector credit toward at least 25 per cent of GDP, would create the liquidity needed for entrepreneurship and industrial expansion.
Simultaneously, medium-term actions, including an Economic Diplomacy Task Force, could help restore at least USD 1.5 billion in annual grants and concessional financing by 2028, while priority projects such as the Dar es Salaam–Chalinze–Morogoro expressway, Bagamoyo Port Phase I, the sixth phase of the Standard Gauge Railway, and major hydropower initiatives could serve as proof-of-concept models for large-scale PPP execution.
A revitalized political environment, supported by reforms to electoral laws, civic freedoms, and institutional oversight, would complement these efforts by re-establishing Tanzania as a trusted partner for investors and lenders alike.
Conclusion: A Nation with the Resources, the Youth, and the Moment
President Samia’s message was not one of despair, but of awakening. Tanzania stands at an economic crossroads where yesterday’s tools will not solve tomorrow’s challenges. The country’s demographic strength, mineral wealth, agricultural potential, and expanding energy capacity give it the raw ingredients to achieve the Vision 2050 target of becoming a trillion-dollar economy with a per-capita income of USD 7,000.
But unlocking these future demands requires institutions that can think ahead, reforms that can restore trust, and partnerships that can mobilize capital without destabilizing the economy. Public-Private Partnerships will be the bridge.
Political and economic reforms will be the foundation. And a National Economic and Social Council can become the strategic brain of the national development project. The path forward is difficult, but it is navigable. And if Tanzania manages this moment with clarity and coordination, Vision 2050 will cease to be an aspiration and become a living reality.
By Dr. Bravious Kahyoza, PhD, Senior Economist at TICGL
Economic diplomacy has become a powerful catalyst in advancing Public-Private Partnerships (PPPs) in Tanzania, unlocking economic opportunities across key sectors such as transportation, mining, tourism, telecom, banking, health, and education. Under the sixth administration, Tanzania has taken deliberate steps to enhance PPPs as a cornerstone for sustainable economic growth and development.
The Role of the Private Sector in Economic Development
The private sector is indispensable in driving economic progress. Through investment, innovation, and job creation, private enterprises expand economic opportunities, generate government revenue, and improve service delivery. A well-structured PPP framework serves as a magnet for investment, ensuring the efficient provision of reliable and affordable socio-economic services while fostering broad-based growth and poverty reduction.
Policy Reforms and Institutional Strengthening
Under the leadership of Hon. Dr. Samia Suluhu Hassan, Tanzania has reinforced its commitment to public-private partnerships (PPPs) by modernizing laws and regulations to create a favorable and sustainable investment environment. A key milestone was the establishment of the Public-Private Partnership Centre in 2023 under the Public-Private Partnership Act, CAP 103. This Centre plays a pivotal role in promoting, coordinating, and supporting PPP projects across the country.
The PPP Centre has made significant progress in reducing bureaucratic hurdles, thereby accelerating collaborations between the public and private sectors. This has led to the expansion of international business engagements, including the Tanzania-Russia Business Investment Forum, the Tanzania-India Business Forum, and the Tanzania-Korea Project Plaza (2024).
The PPP framework has facilitated major projects at various stages of implementation, such as the Spine Injury Treatment and Rehabilitation Centre, Natural Gas Distribution by TPDC, Operation of Longline Vessels for Deep-Sea Fishing, and the Construction of a Four-Star Airport Hotel at Julius Nyerere International Airport. These projects demonstrate the effectiveness of PPPs in enhancing infrastructure and service delivery, where the government focuses on regulation and oversight, while private sector expertise ensures operational efficiency.
Tanzania’s Progress in PPP Development
Since the establishment of the National Public-Private Partnership (PPP) Framework in 2009, Tanzania has made steady progress in improving and expanding its PPP engagements. Under the leadership of the sixth administration, notable reforms have been introduced, resulting in a significant rise in registered investment projects — from 256 in 2021 to 812 by November 2024, as recorded by the Tanzania Investment Centre (TIC).
The Tanzanian government has recognized PPPs as a critical financing mechanism in its Five-Year Development Plan III (FYDP III) covering the period 2021/22 to 2025/26. By 2023, over 50 PPP projects had been identified for preparation across various sectors, including transportation, energy, health, and urban development. Of these, 25 projects were under active development, 15 had been floated for Request for Qualification (RfQ), and 10 had advanced to the Request for Proposal (RfP) stage. Notably, 2 projects had successfully reached financial close, indicating readiness for implementation.
As part of the FYDP III strategy, the PPP Centre is tasked with mobilizing TZS 21 trillion in private capital over five years. This amount represents 51 percent of the capital target set out in the plan and accounts for 17 percent of the total development budget.
A Bright Future for PPPs in Tanzania
Tanzania’s expanding PPP landscape signals a promising future for economic development. By enhancing governance, strengthening institutions, and mobilizing private capital, Tanzania is creating a dynamic investment climate that supports both economic growth and social progress.
The collaboration between public and private sectors remains vital for building infrastructure, expanding services, and improving livelihoods. With robust policies, strategic investments, and international cooperation, Tanzania is well-positioned to emerge as a regional leader in PPP-driven economic transformation.
By Dr. Bravious Kahyoza, PhD, Senior Economist at TICGL
In the pursuit of Tanzania’s Vision 2025, one cannot overstate the critical importance of a robust and multidimensional financing architecture. This Vision—a national aspiration to transform Tanzania into a middle-income, semi-industrialized economy—demands more than ambition.
It demands an ecosystem that nurtures capital flow, attracts diverse investments, and enables sustainable delivery of public goods. At the center of this vision lies the Third National Five-Year Development Plan (FYDP III), a blueprint that has reimagined how financial resources can be mobilized, structured, and deployed for national transformation.
The resource envelope outlined in FYDP III is as bold as it is necessary—Tanzania seeks to marshal approximately 114.8 trillion shillings over five years. It’s a significant leap from the 107 trillion in FYDP II, signalling both expanded aspirations and deeper commitments.
What’s striking is not just the size of this envelope, but its composition. A clear shift is visible: domestic sources are expected to contribute about 62 trillion, while external grants and concessional loans are projected to bring in 12.2 trillion.
The private sector, however, is poised to contribute over 40 trillion shillings—more than a third of the total. That, in itself, is a statement. It suggests a government that is consciously stepping beyond traditional public financing models, turning toward partnerships and collaboration to unlock value and accelerate delivery.
This is where the role of Public-Private Partnerships (PPPs) becomes transformative. PPPs are no longer viewed as stopgap solutions to budgetary shortfalls; rather, they are being positioned as core instruments of public investment.
The government has become increasingly deliberate in designing mechanisms that reduce friction for private capital to engage with national projects. What used to be a tentative exploration of collaboration has matured into a formal, structured, and highly strategic approach.
From personal observation and experience within policy and governance circles, the evolution of PPPs in Tanzania has been anything but linear. Early projects faced inertia—long procurement cycles, ambiguous legal frameworks, and limited public sector capacity to negotiate and manage complex contracts.
But over time, the learning curve sharpened. Today, there is a much more sophisticated understanding of the PPP lifecycle—from project identification and feasibility to financial closure and implementation oversight. The vision is no longer about attracting capital alone; it’s about sharing risk, transferring skills, and ensuring that infrastructure, once built, is maintained and leveraged for broader economic productivity.
One sees this shift materializing in projects across sectors. The Dar es Salaam Rapid Transit (DART) project, for instance, has been a key experiment in urban mobility through PPPs. Though it faced early logistical and political headwinds, its trajectory has shown how well-structured partnerships can deliver high-impact public infrastructure while still allowing for private sector innovation and efficiency.
The project also revealed, perhaps more importantly, the need for institutional readiness and clear governance structures. Lessons from DART and others have informed ongoing efforts to establish a dedicated PPP Centre and a Facilitation Fund, both aimed at speeding up feasibility studies, improving risk assessment, and ensuring that projects entering the PPP pipeline are genuinely bankable.
It is equally important to acknowledge that the success of PPPs is not simply technical—it is cultural. There needs to be a mindset shift within government institutions to treat the private sector not as a vendor, but as a partner.
That partnership is not always easy. It involves negotiation, accountability, and, at times, uncomfortable transparency. But when done right, it yields a dividend that extends far beyond balance sheets.
According to the World Bank’s 2023 review of Tanzanian PPPs, investor confidence tends to rise significantly when governments demonstrate procedural clarity and contractual discipline. This confidence translates not just into capital inflows but into reputational gains that attract future investment.
Meanwhile, another layer of the financing strategy quietly reshaping the development narrative is the emphasis on financial inclusion. The rapid expansion of mobile banking, fintech platforms, and microfinance services has extended the reach of financial tools to over 20 million Tanzanians.
According to World Bank data from 2024, this digital leap has allowed even rural, low-income populations to engage in economic activity, access credit, and build resilience. And here again, PPPs emerge as a powerful instrument.
The private sector's agility in tech innovation, paired with public support for digital infrastructure, is crafting a new financial ecosystem. One can envision future partnerships between fintech firms and local governments, enabling mobile-based agricultural insurance, savings cooperatives, and real-time payment systems for farmers.
This is more than technology. It is about democratizing capital. And in a country where economic exclusion has long mirrored geographic and social marginalization, such democratization is nothing short of revolutionary.
Of course, challenges remain. Bureaucratic inertia, legal ambiguities, and sporadic political interference can all hinder the potential of PPPs. But the policy trajectory outlined in FYDP III suggests that the government is not blind to these obstacles.
There are now active efforts to improve the macroeconomic environment, lowering interest rates, stabilizing inflation, and strengthening the capital base of state-owned enterprises to foster investor confidence. Moreover, reforms are underway to streamline the PPP regulatory framework, build negotiation capacity among government officials, and institutionalize transparency in project planning.
In essence, what Tanzania is attempting is both bold and deeply necessary: to turn a financing strategy into a development ethos. This ethos is one of shared responsibility, where public institutions provide the vision, the legal guardrails, and the long-term commitment, while the private sector brings in innovation, capital, and efficiency.
Vision 2025 will not be realized in boardrooms alone. It will be realized on the roads built through PPPs, in the classrooms equipped through blended financing, and in the mobile apps that connect rural traders to urban markets. The financing strategy of FYDP III is not just about raising funds. It is about redesigning the architecture of economic agency in Tanzania.
As we look ahead, the challenge is no longer about proving whether PPPs work. The evidence is there. The challenge is about institutionalizing what works, scaling what succeeds, and ensuring that the fruits of partnership are shared across society. If that can be done, then the goals of Vision 2025 will no longer be aspirational—they will be within reach.
By Dr. Bravious Kahyoza, PhD, Senior Economist at TICGL and Dr. Jasinta Msamula, PhD. Lecturer Mzumbe University.
The global energy landscape is undergoing a profound transformation as countries strive to balance electricity reliability with the shift to renewable energy. Public-Private Partnerships (PPPs) have emerged as a key strategy to bridge funding gaps, leverage private sector expertise, and distribute project risks.
For Tanzania, embracing energy-based PPPs presents a significant opportunity to enhance electricity access, drive economic growth, and modernize its energy infrastructure.
Global Success Stories in Energy-Based PPPs
Around the world, energy-focused PPPs have delivered groundbreaking achievements, offering valuable lessons on structuring effective partnerships.
The UK, for example, has successfully harnessed offshore wind energy by awarding long-term contracts through transparent bidding processes.
The approach enabled the development of over 10 GW of offshore wind power, including the Dogger Bank Wind Farm (World Bank, 2024).
In Brazil, the Belo Monte Hydropower Project exemplifies the power of government-backed PPPs in delivering large-scale, sustainable energy solutions. With an installed capacity of 11,000 MW, it highlights how well-structured partnerships can mobilize private investment for national energy security.
Various PPP models have facilitated major energy infrastructure projects globally. The Build-Operate-Transfer (BOT) model, for instance, has been instrumental in Turkey’s power grid renovations, allowing private firms to construct and manage facilities before eventually transferring ownership to the government (World Energy Council, 2020).
Likewise, concession agreements have played a crucial role in electricity grid modernization in Chile, enabling commercial operators to manage infrastructure while ensuring public service obligations are met (World Bank, 2021).
Lessons from Africa’s PPP Experience
Closer to home, Kenya’s Power Purchase Agreements (PPAs) have successfully attracted private investment into large-scale energy projects, such as the Lake Turkana Wind Farm—Africa’s largest wind farm, which generates 310 MW and supplies 17% of Kenya’s electricity (African Development Bank, 2018).
The project underscores the role of PPPs in Africa and highlights the importance of interconnection agreements for integrating independent power producers into national grids.
Similarly, South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has been a game-changer.
The program has attracted $15 billion in private investment and awarded contracts for 64 renewable energy projects, generating 3,922 MW of clean energy (World Bank, 2024).
These successes demonstrate that well-structured PPP frameworks can attract international funding, reduce investment risks, and create scalable energy models.
The Future: Climate-Smart PPPs and Sustainable Energy
As the global focus shifts towards sustainable and resilient infrastructure, climate-smart PPPs are becoming increasingly vital.
The World Bank emphasizes the need for climate risk assessments, environmental impact studies, and disaster preparedness planning in energy projects.
A notable example is Japan’s Sendai School Meal Supply Centre, which was designed with resilient infrastructure, allowing it to resume operations quickly after a natural disaster (World Bank, 2017).
Meanwhile, the University of Iowa’s energy PPP initiative sets a benchmark for zero-carbon transition goals, demonstrating how private sector innovation can drive sustainability objectives (PPP Climate Report, 2021).
These global trends highlight the growing importance of climate resilience in energy projects—an area Tanzania must also prioritize as it explores energy-based PPPs.
From global best practices and tailoring PPP models to its specific needs, Tanzania has the potential to unlock vast renewable energy opportunities, strengthen its electricity infrastructure, and position itself for sustainable economic growth.
Tanzania’s Position: Opportunities and Challenges
Despite its vast energy potential, Tanzania faces significant hurdles in fully leveraging its resources. Bureaucratic delays, inconsistent regulations, and limited private sector participation have slowed progress.
However, recent developments—such as the Julius Nyerere Hydropower Plant—suggest that policy shifts may be underway, signaling new opportunities for growth.
One of Tanzania’s key energy-based Public-Private Partnership (PPP) models is the Build-Own-Operate (BOO) approach, seen in projects like Songas Limited.
Songas has played a crucial role in national energy generation, yet it has faced legal and operational challenges that highlight broader structural inefficiencies (Kanyamyoga, 2018).
In addition, issues such as opaque procurement processes, insufficient financial guarantees, and over-reliance on hydropower continue to pose risks, particularly in times of drought. If Tanzania is to unlock its full energy potential, these challenges must be addressed head-on.
What Needs to Be Done?
To establish a robust and investor-friendly energy sector, Tanzania must take decisive action. Strengthening regulatory frameworks is essential, including enacting clear, transparent, and investor-friendly energy policies, establishing open dispute resolution mechanisms, and introducing competitive bidding systems like South Africa’s REIPPPP to ensure fair project allocation.
Additionally, enhancing investment incentives by introducing tax incentives, fixed tariffs, and long-term Power Purchase Agreements (PPAs) will help reduce investor risks.
Diversifying energy sources by investing in solar, wind, and geothermal energy will reduce dependence on hydropower and mitigate climate-related risks.
Improving institutional capacity is equally important. Establishing a dedicated PPP unit within the Ministry of Energy would streamline approvals, enhance regulatory oversight, and facilitate investor coordination.
Implementing capacity-building initiatives for energy-sector regulators will also ensure smoother facilitation of PPP projects, drawing lessons from successful PPP models in Brazil and Kenya.
The Way Forward
Tanzania stands at a pivotal moment. By adopting global best practices and refining its PPP framework, the country can unlock new energy opportunities, enhance power reliability, and drive long-term economic growth.
A transparent, structured PPP model will not only attract investment but also ensure energy security and sustainability for future generations. While the challenges are considerable, the rewards are equally significant. With the right reforms, Tanzania’s energy sector can become a powerful driver of national development.
