Tanzania’s Energy Future: Catalyst or Constraint?

Tanzania’s energy story is best understood as a country at a development crossroads, where the choices made today will determine whether energy becomes a constraint or a catalyst for long-term growth.

Energy demand in Tanzania is rising rapidly due to population growth and economic expansion. (SID, 2024). In order to support the growing population Tanzania needs a renewable energy plan that utilises the nation's green industrial potential. While there is national progress towards increased energy security,  Tanzanian access to electricity remains below 50% (AfDB, 2025), with stark rural-urban inequalities. Over 80% of households still rely on traditional biomass for cooking, with significant health and environmental costs. While hydropower is growing in prominence in Tanzania, natural gas still makes up the majority (70%) of electricity generation (IEA, 2023).

Tanzania is highly exposed to climate risks, with rising temperatures, shifting rainfall patterns, already affecting livelihoods and economic stability (UNDP, n.d.). Droughts threaten agriculture, while floods damage infrastructure and displace communities and severely impact food security. The country’s reliance on hydropower also makes its energy system vulnerable to climate variability. At the same time, widespread dependence on biomass for cooking contributes to deforestation, further exacerbating environmental degradation. These overlapping risks highlight the need for a more resilient energy system, one that reduces exposure to climate shocks while supporting sustainable development, and one that utilises all available natural resources and not just hydropower. 

Tanzania has an abundance of natural resources that can be used for renewable energy generation with solar power being the most feasible and abundant form of potential renewable energy (Okika et al, 2025). In order to secure a sustainable and equitable energy future for Tanzania, these renewable generation options need to be prioritised. Currently modern renewable energy generation only accounts for less than 1% of grid capacity. 

Outside of increased grid capacity, renewable energy poses an opportunity to improve electricity access to rural and island communities through decentralised solar provision using micro- and mini-grids. These systems can be deployed more quickly and at lower cost than traditional grid extensions, particularly in geographically dispersed or hard-to-reach areas. Solar-based mini-grids and standalone systems provide reliable, locally managed power that is not dependent on fuel supply chains or vulnerable transmission networks. This has immediate impacts on equality and development.

In addition to its abundance of renewable energy resources, Tanzania holds significant reserves of critical minerals. The country’s graphite deposits are among the largest in the world, and recent discoveries of minerals such as cobalt and rare earth elements further strengthen its strategic position. Tanzania is already beginning to shift in this direction. A country historically focused on gold mining is gradually expanding its extractive sector to include these transition minerals (Roeback, 2026). However, fully realising this opportunity will require overcoming key structural constraints. Transport infrastructure remains underdeveloped, increasing the cost and complexity of moving minerals to processing sites and export markets. At the same time, gaps in technical skills and human capital limit the country’s ability to move beyond raw material extraction into higher-value activities such as refining, processing, and manufacturing.

This is where the link between energy and industrial policy becomes critical. A renewable-powered energy system could provide the reliable and affordable electricity needed to support domestic processing industries, from graphite purification to battery component manufacturing. With targeted investment, skills development, and coordinated policy support, Tanzania has the potential to build a green industrial base that captures more value locally, creates skilled jobs, and positions the country as a key player in global clean energy supply chains.

Tanzania has set out an ambitious vision for its energy future, including targets of 75% renewable electricity and universal electricity access by 2030, alongside 80% clean cooking by 2034 and a 30–35% emissions reduction under its Nationally Determined Contribution (Nishati, 2024; Africa Energy Portal, 2025). Despite these ambitions, the Power System Master Plan projects that by 2040, nearly 60% of electricity capacity will still come from fossil fuels, including gas and new coal, while solar, wind, and geothermal account for only a small share (EWURA, 2024). This disconnect risks locking the country into high-emissions infrastructure, increasing the likelihood of stranded assets, and missing the economic opportunities associated with rapidly scaling renewable energy.

The path forward is clear. Tanzania must realign its power planning to prioritise renewables, modernise and expand the grid while strengthening regional integration. At the same time, energy policy must be linked to industrial strategy, using critical minerals as a foundation for domestic processing and manufacturing. If pursued with urgency and coordination, this approach could deliver universal access to energy, while building a green industrial base. This will result in the creation of jobs across emerging value chains creating employment opportunities for a growing population and positioning Tanzania as a regional leader in green power generation.