Sebastian KastuliCommercial Manager

SongasTanzania

Songas Project – 8 years record of achievement

� Supplies around 1/3 of the country’s power from UPP

� Cheapest thermal power in the country <$0.06/kWh

� Provides gas for around half of the country’s useable power capacity

� Savings to Tanzania >USD 2.0 billion

� Two Investments so far

� 2004 original investment

� 2005 further generating capacity

Songas business today

TANESCOGas Sellers

(PAT / TPDC)

Train 1

Train 2Pipeline

UGT 1 UGT 2

UGT 3 UGT 4

UGT 6UGT 5

Song's provides two services:�Process & transport gas on behalf of TPDC & PAT to DSM�Generate Electricity for TANESCO

Ubungo Power Plant (UPP)

� Six gas turbines at UPP generate and supply electricity to Tanesco.

� 2 gas turbines are Siemens’engines – SGT-600 average capacity of 20MW each,

� 4 gas turbines are General Electric engines type LM6000 average capacity of 35MW each.

� Total Generation Capacity 180MW

Siemens SGT-600 Industrial Gas Turbine

An aerial view of the SSI Gas Plant

Capacity of the current infrastructure

SSI Production - Monthly Max Capacity, Average daily output per month (MMSCFD)

Promoting Private Sector Investment in Tanzania

� Clear responsibility for the planning of and contracting for new investments,

� Clear strategic energy sector master plan,

� Stable and transparent legal and regulatory framework,

� Government responsiveness to the needs of the investors,

� Minimum government interference to private investment,

� Provide opportunities for private sector to build, operate and own power facilities,

� Improve the public debate about the energy sector.

What investors needs from National Government?

Promoting Private Sector Investment in Tanzania (Continued)

� Establish a regulatory e.g. .EWURA in Tanzania,

� Implement realistic and sustainable electricity pricing tariff

� Implementation of structural reforms that clearly delineate the roles of grid and distribution system operator and the generation sector

� Taxes and duties e.g. Exemption from taxes, tax relief, grace periods for debts

� Adequate cash flow in the sector e.g. Cost-reflective tariffs setting TZ as example

What investors needs from Regulator & The Utility.

Benefits of private Sector Investments

� Mobilise international (and domestic) Capital,

� Reduced Burden on Government Budget,

� Allows focus of Governmental funds on sectors that can’t attract private capital

� Ensures world class performance of availability, Reliability, Efficiency of the power

� Maintain international standards of;

� Safety

� Operation and Maintenance� Environmental Compliance

� Regulatory and Legal Compliance

� Enhance Local competence

� Stimulate the introduction of new technology

Promoting Private Sector Investment

THANK YOU

ANY QUESTIONS/COMMENTS PLEASE?