* Frequent power blackouts hurting economic growth
* Tanzania has geothermal potential of 650 MW
By Beatrice Gachenge
NAIROBI, Nov 21 Tanzania plans to drill its
first geothermal power plant next year and expand renewable
energy to plug a power deficit that the International Monetary
Fund sees as an obstacle to the growth of east Africa's second
Tanzania is racing to introduce a mix of power generation to
cut reliance on hydroelectric dams that are vulnerable to
erratic rainfall, and also aims to produce power from natural
gas following big discoveries offshore.
Stella Mandago, a senior energy officer at African
Development Bank (AfDB), told Reuters on the sidelines of a
geothermal conference that the bank would, with other
development agencies, co-fund $50 million in the form of a grant
and loan to Tanzania.
Mandago said $25 million would be used on drilling of steam
wells in Mbeya, south of Tanzania, while the rest would be used
to develop renewable energy sources including solar and wind.
"The country will receive $50 million which will be
disbursed right after the approval in February 2013," she said.
"There is a potential of 650 megawatts (geothermal), but we
are going to focus on 200 MW first, in two phases, starting with
100 MW," said Mandago. The total capital requirement for the 200
MW would be $400 million, she added.
The first 100 MW of geothermal power is expected to be
available by 2016. Drilling for the second phase is due to start
in 2015 and would become available by 2018.
Although drilling down to access energy from the earth is
expensive initially, the subsequent supply of cheaper geothermal
power would help the country's economic growth. The IMF warned
in October that Tanzania needs to limit power outages if it
wants to maintain buoyant growth this year and next.
Tanzania produces about 800 MW, hardly meeting its power
demand, estimated to grow to 1,583 MW by 2015.
Kenya is the first African country to drill geothermal
power, tapping steam energy in the Rift Valley region, to
complement hydro and thermal or fuel-based power.
(Editing by James Macharia; Editing by Anthony Barker)