Tanzania’s energy sector is anchored by natural gas, hydropower and rapidly expanding renewable energy capacity. The country holds substantial offshore and onshore natural gas reserves, estimated at over 57 trillion cubic feet, primarily located in southern Tanzania. Gas production is already supplying domestic power generation, industrial users and households. Hydropower remains a key component of the energy mix, complemented by solar and wind projects. Tanzania is also positioning itself as a regional energy hub through cross border power interconnections.
Economic Contribution
Energy plays a strategic role in economic development, supporting industrialisation, mining and services. Electricity generation capacity has expanded significantly, with natural gas accounting for over 50% of installed capacity. Public and private investment in energy infrastructure has increased markedly over the past decade, improving electricity access rates from below 20% in 2010 to over 45% nationally. Energy investments have helped reduce power shortages and stabilise industrial output.
Outlook
The outlook for the energy sector is strong, driven by ongoing gas development, expansion of hydropower projects and increased renewable deployment. Planned liquefied natural gas development is expected to position Tanzania as a future gas exporter. Continued investment in transmission and distribution, alongside growing industrial and urban demand, will further strengthen the sector’s contribution to growth and energy security.
