Tanzania expects to conclude agreements on several major investment projects in the coming months, including a $42 billion liquefied natural gas (LNG) development that could strengthen its position as an energy hub in East Africa.
- Tanzania is nearing agreements on major investment projects, including a $42 billion LNG development poised to transform the country into an East African energy powerhouse.
- Global energy leaders like Equinor, Shell, ExxonMobil, and others are spearheading the project, set to tap into over 47 trillion cubic feet of natural gas.
- The government aims to almost double its electricity generation to 8,000 MW by 2030, targeting 75% clean energy sources such as hydro, solar, wind, and gas.
- Tanzania is reforming its financial landscape by welcoming foreign investors into its domestic debt market and encouraging more corporate debt issuance.
Finance Minister Khamis Mussa Omar said the negotiations were nearing completion, after officials had initially expected the LNG agreement to be signed before June.
The project, led by Equinor and Shell, is expected to unlock 47.13 trillion cubic feet of natural gas reserves. ExxonMobil, Pavilion Energy, Medco Energi and state-owned Tanzania Petroleum Development Corporation are also involved, according to Reuters.
Although most of the gas will be exported, a portion will be reserved for domestic consumption. The development forms part of broader efforts to expand the region's energy industry, alongside Uganda's plan to begin its first oil exports through Tanzania's port of Tanga in early 2027.
Power generation expansion
Tanzania plans to nearly double its electricity generation capacity to 8,000 megawatts by 2030, while increasing the share of energy from sources it classifies as clean to around 75%. These include hydropower, solar, wind and natural gas.
The government wants to attract more international capital into projects capable of generating revenue and financing their own operations.
Tanzania is also opening its domestic debt market to foreign investors as it explores new ways to finance public spending. Reforms introduced this year have widened foreign access to domestic bonds, established a sovereign yield curve and encouraged corporate debt issuance.
The government has not decided whether to issue an international bond, while the central bank is assessing the potential risks of increased foreign participation.
Domestic revenue now finances about two-thirds of Tanzania's 62.3 trillion shilling ($23.7 billion) budget, as foreign development assistance declines.
The government was also considering a new International Monetary Fund lending programme, with a decision expected by June. Its previous $1.7 billion programme ended in July.