Debt-ridden Tanzania power utility firm to register Sh9bn operating profit this year

The Tanzania Electric Supply Company Limited (Tanesco) has reached a breakeven point and will start making profits this year, a cabinet minister said on Wednesday.

The Minister for Energy, Dr Madard Kalemani told the Parliament that during the 2019 calendar year, Tanesco will make Sh9 billion in operating profit.

Dr Kalemani was responding to MPs’ views during the debate for his ministry’s Sh2.142 trillion-budget for the 2019/20 financial year.

He said the state-run power utility firm registered a loss of Sh349 billion in 2017 but the amount was reduced to Sh122 billion in 2018.

Despite an improved financial performance, Dr Kalemani noted that Tanesco was still wallowing in massive debts.

“In total, Tanesco’s debts stand at Sh957 billion. We are reviewing the debts but we remain confident that by 2026, we will have settled them all,” he said.

Most of the debts were acquired during the days when Tanesco purchased oil-fired electricity from independent producers.

“Some of these contracts have since been revoked,” he said.

A past tendency of importing electricity poles from South Africa was also contributing to the accumulation of debts.

“At present, these poles are sourced domestically. The presence of companies that manufacture electricity metres (popularly known as Luku metres) and wires in the country has also significantly reduced the amount that Tanesco used to spend in importing the products,” he said.

Data from the Ministry of Energy show that Tanzania’s demand for Luku metres currently stands at 450,000 units annually.

Tanzania’s two Luku metres manufacturers are capable of producing twice more than the market demand.

An imported single-phase Luku metre retails at Sh170,000 while those produced domestically costs Sh120,000 per gadget.

Similarly, a three-phase meter was purchased abroad for Sh700,000 but the same costs Sh450,000 locally.

Source: Citizen

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