Projects

General government authorisation

What government authorisations must investors or owners obtain prior to constructing or directly or indirectly transferring or acquiring a renewable energy project?

In Tanzania, titles to land or lease must be acquired on an area where the project is going to be constructed (the major stakeholders are TIC and the Ministry of Lands, Housing and Human Developments and the Tanzania Revenue Authority (TRA); authorisation may also be required from villages that are involved). This may include obtaining:

  • local permission to establish an SPP on a specific land parcel;
  • permission from the district level;
  • permission (and the title deed) from the Ministry of Lands or a Derivative Rights Title from TIC; and
  • Tax Clearance Certificate(s) for the directly or indirectly transferring or acquiring a renewable energy project assets depending on the transaction.

Water rights must be acquired for any projects that will involve the use of water, such as hydropower projects in rivers and lake basins.

A letter of intent for small power projects that intend to sell electricity to a DNO do so pursuant to a PPA. The first step toward concluding a PPA is obtaining the letter of intent from the DNO. An letter of intent indicates that the DNO has no objections in principle to interconnecting a power plant of the proposed type, size and power export capacity at the proposed location.

Other authorisations may include:

  • business registration, business licence, taxpayer Identification Number and VAT certificate;
  • a building permit issued by the local government authority;
  • an environmental impact assessment issued by NEMC and social clearances; and
  • EWURA licences to provide regulated services in electricity sector or EWURA consents in transfers.

In case of any merger or acquisition of the existing EWURA licensee, clearance from the Fair Competition Commission may be required.

Generally, government authorisations for investors or owners to obtain prior to the construction of renewable energy projects depend on the capacity of energy to be produced in the project.

Offtake arrangements

What type of offtake arrangements are available and typically used for utility-scale renewables projects?

Utility-scale renewable projects shall be developed through executing a letter of intent with a public DNO that confirms the physical ability of the DNO to purchase electricity from the SPP delivered at the interconnection point.

The DNO shall, not later than 30 working days after receipt of a request for a letter of intent or after correction of the application, notify the applicant in writing of its decision either to grant or deny such request, provided that no application shall be unreasonably denied. Power projects shall be procured by the DNO by tendering as provided for in the rules and shall be advertised from time to time.

EWURA has developed standardised PPAs for projects of less than 10MW to be used by SPPs and DNOs in executing agreements. SPP developers are allowed to sell electricity to any other entity, subject to the terms and conditions that the parties may agree upon.

Procurement of offtaker agreements

How are long-term power purchase agreements procured by the offtakers in your jurisdiction? Are they the subject of feed-in tariffs, the subject of multi-project competitive tenders, or are they typically developed through the submission of unsolicited tenders?

PPAs in Tanzania procured by public DNOs are by way of open competitive tenders. An SPP operator shall charge a feed-in tariff or a tariff that has been approved by EWURA. The feed-in tariff for wind and solarSPPs shall only be applicable to the DNO’s isolated minigrids.

A private DNO may procure an SPP using wind or solar technology applying the procedure prescribed under the rules published by EWURA or using their own procedures, provided that such procedures arecompetitive and approved by EWURA.

Operational authorisation

What government authorisations are required to operate a renewable energy project and sell electricity from renewable energy projects?

Activities that require a licence are generation, transmission, distribution, supply, system operation, cross-border trade in electricity, physical and financial trade in electricity and electrical installation.

Any person intending to conduct any of these activities shall be required to apply to EWURA for a licence, unless that person or the activity has been exempted by EWURA. A licensee may, under the rules made by EWURA, conclude agreements for the purchase and sale of electricity.

Decommissioning

Are there legal requirements for the decommissioning of renewable energy projects? Must these requirements be funded by a sinking fund or through other credit enhancements during the operational phase of a renewable energy project?

Energy laws in Tanzania do not directly provide requirements for the decommissioning of renewable energy projects. However, EWURA is mandated to oversee health, environment and security in all energy projects and can impose measures to ensure that decommissioning is done by taking into account the environmental and social impact assessments conducted before or after the undertaking of the project.

After the expiry of an energy project, the proponent or operator shall, at his or her own cost, undertake the safe decommissioning, site rehabilitation and ecosystem restoration before the closure of the site project or undertaking.

The Environmental Impact Assessment and Audit Regulations 2005 require all energy projects to conduct an audit during subsistence of the project or on decommissioning.