Challenges Affecting Procurement Process for Geothermal Projects in Tanzania

Abstract

Geothermal development industry is a new venture in Tanzania that involves a number of development stages with multi-procurement processes in almost every stage of development until the project is realized. Tanzania Geothermal Development Company Limited (TGDC) is the sole company (100% owned by the Government) dedicated to spearhead geothermal development in Tanzania. TGDC since it’s establishment has been engaged in different geothermal research projects and other projects for establishment of suitable environment for smoothen and sustainably development of geothermal in the country. Procurement processes have been taking place in almost all the projects implemented. Both Government funds and development partner funds have been used to finance the projects. The first major procurement for geothermal associated activities was registered in 2015 which involved funds from development partner (AfDB) under Scaling up Renewable Energy (SREP) funds. Since then a number of challenges have been recorded e.g. risk management, procurement time, lack of local suppliers, unclear development partners’ conditions, and changing of project implementation guidelines, and managing political expectations. This paper will discuss the challenges encountered in various procurement processes and will pause some mitigation measures taken. Much focus will be on the Ngozi Geothermal Prospect, being the flagship site for Tanzania Geothermal Projects Development.