Johannesburg - The Development Bank of Southern Africa is lending Tanzania $314 million for two power plants, South Africa's treasury said on Thursday, as the east African nation country looks to tap more of its abundant gas reserves.
The state-owned lender has underwritten $227 million for the construction of the Kilwa Power plant and another $87 million for a 240 megawatt gas-fired plant at Kinyerezi, the treasury said.
Despite natural gas reserves estimated at more than 41 trillion cubic feet, Tanzania experiences frequent power outages as it is heavily reliant on hydro-power capacity and fuel-run generators.
The country's average power demand stands at 750 MW per day and peaks at around 850 MW.
The state-owned power utility burns fuel worth more than double the amount of money it receives as daily revenue, and is now racing to build infrastructure to tap a gas potential that is seen equal to some Middle East producers.
Last month, the east African country signed a $692.7 million contract for the construction of a 400kV transmission line with a Chinese company.
China is also financing a $1.2 billion 532km natural gas pipeline from the southeast of the country to the commercial capital Dar es Salaam.
The Development Bank of Southern Africa is also active in Angola, where it is financing around $146 million of a $700 million facility it is helping to arrange for two Angolan national roads. - Reuters