Tanzania in discussions with India to adopt LPG subsidy mechanism

Country invites Indian investors to invest in solar projects

Tanzania, India’s second-largest trading partner in Africa, is in talks with the government to adopt the country’s LPG subsidy mechanism to promote clean cooking, said its Deputy Prime Minister and Energy Minister Doto Mashaka Biteko. 

The country has invited Indian manufacturers to set up assembly plants for solar panels and accessories as well as to invest in solar projects there. 

Tanzania aims to increase the percentage of households using clean cooking methods from the current 6.9 per cent to 75-80 per cent by 2030. 

Additionally, it seeks to boost solar energy generation from 58 per cent to 70 per cent to diversify its reliance on hydroelectric power. 

“We have a clean cooking strategy, which is our top priority. Recently, we signed the energy compact for Tanzania, a framework outlining our ambitions for advancing the energy sector, with clean cooking being a key focus. India is equipped with technology for clean cooking, such as solar cook stoves and biogas systems, as well as subsidy mechanisms. These are critical insights; my delegation and I intend to explore and implement practically,” Biteko told Business Standard, in an interview, during his visit to Delhi. 

“We decided to use the India Energy Week (IEW) platform to invite private players in clean cooking to learn from India’s approach. We want to engage the private sector in the process so they can take ownership of the business, as the clean cooking sector has many opportunities — from LPG distribution to public sensitisation about the benefits of using clean cooking methods alongside traditional options,” he said. 

Currently, Tanzania’s renewable energy generation is largely hydro-based, contributing 2.5 Gw of the total installed capacity of 3.6 Gw.  

He revealed that investors are interested in exploring at least one major project in Tanzania. He believes that involving international companies and civil society organisations (CSOs), along with India, will expedite solar energy development in his country. 

Currently, Tanzania is working on a 150 Mw solar project in Kishapu. It has partnered the International Solar Alliance (ISA) to review its integration and attract investors through a solar compact. 

When asked about the possibility of signing a free trade agreement with India, the minister said, “Yes, we plan to import, but we have also invited manufacturers to set up assembly plants for solar panels and accessories in Tanzania. We are discussing this with ISA as well.” 

The deputy PM noted that private players have shown interest but face challenges, particularly regarding taxation.

To encourage investment, Tanzania plans to offer Tanzania Investment Centre (TIC), which will provide tax and non-tax incentives. 

“Once interested parties connect with TIC, we will advocate for the establishment of facilities to assemble solar products locally, promoting domestic sales,” he added. 

To build local capacity, the government will utilise its training institutions to educate the workforce on manufacturing and assembling solar technology. It will also stress on the importance of creating a domestic market rather than relying solely on imports. 

Tanzania’s major imports from India include mineral fuels, pharmaceutical products, vehicles and parts, sugar and confectionery, and machinery. 

India is the fifth-largest investor in Tanzania, importing cashew nuts, pigeon peas, spices, avocados, and other agricultural products. 

In the financial year 2023-24, bilateral trade between the two countries touched $7.9 billion, marking a 22 per cent rise from the previous year.

ON THE TABLE

 

*  Tanzania has invited Indian manufacturers to invest in solar projects

 

*  Plans to offer tax and non-tax incentives 

 

*  Aims to raise clean cooking adoption from 6.9% to 75-80% by 2030

 

*  Seeks to increase solar energy generation to 70%