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National Energy Public Investment Fund (NEPIF) the solution for Tanzania's Power Shortage

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As Tanzania faces a perennial electricity shortage, it is the responsibility of patriots to come up with new ideas for remedial action that can make power blues a thing of the past.

Our ideas will help us make a collective action to confront this problem. We can't defeat past failure with old tired ideas. We must come up with new ideas. Yes, new ideas are the weapons for success if we want to achieve an adequate and reliable power supply for the long term.

Tanzania's energy sector has been in the hands of ruling elite for many years. Poor performance of Tanzania's Electric Supply Company (TANESCO) has, of course, been a cause of heated controversy in the company and the political arena.

But all of that doesn't stop us from asking ourselves two fundamental questions concerning our energy sector? One, what are the factors which will bring about the transition from one point to another? Two, who will provide the necessary leadership to take us from one point to another?

The first question is important because it will help us to wake up from the relaxed state we are in - that of waiting for help instead of generating new ideas to solve our energy problem. Developed countries are working hard to solve their energy problems.

Recently twelve European companies launched a 400-billion-euro (560-billion-dollar) initiative to plant huge solar farms in Africa and the Middle East to produce energy for Europe (not for Africa). It is evident that though the project will take place in Africa, its intention is not to solve the energy problems of Africa. Thus this means that Tanzania's energy problem can only be solved by Tanzanian initiatives.

This takes us to the answer of the first question on how we can move forward. The main solution is that a collaboration between TANESCO and the Tanzanian public is urgently needed. This collaboration would be a part of the solution towards the significant investment which Tanzania needs and which will eventually meet the growing demand for energy. Such results can't be achieved if we continue to rely on aid or other financing methods which charge Tanzania (us) very expensive and very high interest rates. As a way forward we can take advantage of the Capital Market and Securities (Collective Investment Scheme) Regulations, 1997, by establishing a National Energy Public Investment Fund (NEPIF). The fund will aim to promote the development and use of renewable energy (solar energy and wind power). Moreover, by investing in conjunction with TANESCO, the fund can achieve its aim without taking all the risks for the whole business and the technical aspects involved.

For example, if we were to issue 4 million shares in the first three years of the fund, I am sure those shares would be oversubscribed before the end of the third year. And, if each share was priced at 100 USD, we could raise 400 Million USD to use for the development of renewable energy.

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To make sure this investment scheme gives an opportunity to all Tanzanians from all walks of life, the plan can provide investors with the opportunity to buy shares through the TANESCO pay points infrastructure or through mobile phone banking like M-PESA, which can enable people who have no access to banking facilities to use their mobile phone to take advantage of this potentially profitable developmental scheme.

We are very excited about joining the East African Power Pool, but the question is, do we have enough electricity to export to other countries in the power pool? Or are we going to be the importers of electricity as we import most goods? The nature of our aspirations to export power to other countries is positive, but we can't realize them by leaving this issue to TANESCO alone. Thus this provides the answer to the second question: Who will provide the necessary leadership to take us from one point to another? I believe that you and I should provide that leadership because the public interest requires men and women of intelligence and good will to do things that will transform the society of today and tomorrow.

Moreover, an example of the above is seen in TANESCO's Corporate Business Plan (2007-2011) which doesn't provide clarity about our desired ends. When it says it wants to export electricity to Kenya by 2010 while at the same time saying we won't have enough electricity for ourselves for the next two years, it depicts contradiction and it doesn't make sense. Therefore, we need more ideas which will provide knowledge of all the available alternatives and the means to achieve these ends.

To conclude, I return to the first question which this commentary has sought to answer. What are the factors which will bring about the transition from one point to another in the energy sector? It is a difficult, potentially threatening question, but it is obvious that the starting point, if we are serious as a nation about wanting energy sector improvement, is a general sense of responsibility and the need for the public to come up with new ideas, one of which is the establishment of the National Energy Public Investment Fund (NEPIF) as elaborated in this article.

This article was first published in Business Times Tanzania: (www.businesstimes.co.tz)

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http://www.businesstimes.co.tz/ or www.tanzaniawealth.com
The writer is a Tanzanian Young man who has passion for reforms in Tanzania. You can read his columns at Business Times Tanzania every friday

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