Globeleq’s 192MW natural gas plant contract in Tanzania expires

Songas’ 20-year contract for generation of power in Tanzania using the country’s vast natural gas resources has expired.

The expiry of the contract was confirmed by the Tanzania Electric Supply Company Limited (TANESCO), the State-owned power distributor, in a statement last week.

UK-based Globeleq, which is the largest Independent Power Producer (IPP) in Africa, is the majority shareholder in Songas with a stake of 54.1%.

Globeleq is owned by British International Investment (BII) (70%) of UK and Norfund (30%) of Norway. BII and Norfund are development finance institutions which support investment in developing countries.

The remaining stake is owned by Tanzanian State-owned companies, namely Tanzania Petroleum Development Corporation (28.69%), Tanzania Development Finance Corporation Ltd (7.65%) and TANESCO (9.56%).

Songas started generating power from its 192MW Ubungo Gas Turbine Power Plant in 2004, with Songas going on to become one of the largest private power producers in the East African country.

Before the expiry of its contract, the firm was supplying about 20% of Tanzania’s electricity.

TANESCO would like to inform the public of the end of the contract for power purchase from Songas. This contract has lasted for 20 years and has expired on October 31, 2024

tanesco

TANESCO assured Tanzanians that the exit of Songas will not lead to interruption in power supply in the country. The power supplier said the country was still generating more electricity than demand.

This has been occasioned by the good development in the Julius Nyerere hydroelectric power dam which is so far supplying 940MW to the national grid

The company further said that Tanzania’s decision not to renew the Songas contract was to protect the “greater good of the country”.

Globeleq is also building a 35MW geothermal power plant in Kenya, which is set for completion and commissioning in the second half of 2025.

The firm is one of three IPPs that are building 35MW power plants in the Menengai Geothermal Field in Nakuru with a total capacity of 105MW.

Once complete, the plant is expected to inject the Kenyan grid with much needed generation capacity to alleviate load shedding.

brian@theenergyreview.com