Tanzanian government is seeking $200 million loan from the World Bank for debt-ridden state power supplier TANESCO, the country’s energy minister said on Monday.
The ministry in a statement said the Tanzania Electric Supply Company (TANESCO) has a debt of $363 million, up from $250 million at the end of 2015.
The East African country’s President John Magufuli two weeks ago declined to allow the utility to hike prices to cover costs.
Magufuli is said to want cheap electricity to drive industrialization, but the World Bank is likely to insist the loss-making utility increases prices to enable it cover the cost of production and also to begin much needed reforms.
“As part of efforts to reduce TANESCO’s arrears … and improve its operations, the World Bank has held talks with the government through the Ministry of Energy and Minerals for a $200 million loan,” the ministry said in a statement.
Tanzania’s energy regulator approved on Dec. 31 a tariff hike of 8.53 percent, less than half of what the utility said it needed to cover the losses