The Ministry of Energy is discussing with the Ministry of Finance and Planning to have a tax exemption on renewable energy (RE) as a way of encouraging more investments in the sector.
According to a report to achieve 100% renewable energy approximately $160 billion in investments is required for the renewable energy sector to become a reality, including investments in replacements after the economic lifetime of plants expire, totaling around $5 billion annually.
The total amount of $310 billion is required for an advanced investment to 2050, averaging $9 billion annually.
The Energy engineer from the Ministry of Energy, Ms. Nyaso Makwaya, revealed that Tanzania would shift almost 99 percent of the entire investment towards cogeneration and renewable and that the ministry wanted to create a favorable environment for the sector, including having appropriate policies, strategies, and special tax preferences for REs.
"We have had a number of foreign investors in renewable energy, but there have been a number of challenges including community misunderstandings with the investors," she said, adding that such hindrances were setting back plans for feasibility studies, investments, and acquisition of grants for the project.
Currently, sources of renewable energy in the country include geothermal, solar energy, wind and bio-energies that are yet to come to their full potential as currently it only constituted 2 percent of the power generation.
She added the ministry has a new plan where all investors in energy were invited to apply for projects through tenders and not individually as initially done. She stressed that the new plan ensured the investors competed at favorable interest rates that ensured the government benefited.