Construction of Tanzania’s first natural gas fired combined cycle power plant has started, the firms building the project have announced.

Sumitomo Corporation, Mitsubishi Hitachi Power Systems (MHPS) and Toshiba Plant Systems & Services are building the 240 MW power plant under an engineering, procurement and construction contract awarded by state-run Tanzania Electric Supply Corporation (Tanesco).

The plant will comprise six MHPS H-25 gas turbines, Toshiba heat recovery boilers and steam turbines, and will provide nearly 20 per cent of Tanzania’s power generating capacity.

The project will cost approximately 35 billion yen, the majority of which will co-financed by the Japan Bank for International Cooperation and Sumitomo Mitsui Banking Corporation. Insurance for this commercial bank financing will be provided by Nippon Export and Investment Insurance.

With demand for electric power surging, Tanzania is suffering from chronic power shortages due to a decline in hydroelectric power generation, its primary power source. The country has resorted to using power-generating facilities leased at relatively high rates to serve as emergency power sources, giving rise to fiscal difficulties and making electric power development an issue of great urgency.

Large-scale domestic natural gas fields have been discovered in Tanzania, and the country is hoping to use the gas to nearly double its 2012 electricity generating capacity by 2018, when the Kinyerezi power plant is expected to be completed.