Tanzania and Kiwira Coal Power Limited signed a power generation deal worth about $271 million. Kiwira Coal would supply the national grid with 200 MW.
The minister of energy and minerals, Ibrahim Msabaha, said the contract would sell electricity to Tanzania Electric Supply Company (TANESCO) for no more than 5.6 US cents per kW for 20 years. The government also plans to open a special escrow account worth about $13.2 million to enable the utility to settle electricity bills for two months.
The power project would be done in three phases. The first would entail a 50 MW power station, construction on which would begin in July 2007. This would include energy generating and transmission line and facility transfer.
The minister said the power plant project was expected to cost about $250 million, while the transmission line would cost about $21.8 million. The second phase would be a 100 MW project to start in November 2007. The third phase could only be implemented depending on the performance of the initial one and the capacity of TANESCO to buy more power.