4.9 Energy (Supply)
A. Overall Contribution to Economy
According to the National Energy Policy, the objectives of the energy sector are twofold: To develop the
available sources of energy and provide substitutes for imported petroleum products, and to ensure that the existing
and an expanded energy supply is environmentally sustainable.
Tanzania is endowed with various energy resources. Fuel wood and other forms of biomass supply 89.5% of the
country's energy needs. Commercial energy sources, mainly petroleum and electricity, supply 8.2% and 1.7%,
respectively. Eighty percent of the electricity supply is from hydroelectric dams, while the other twenty percent
comes from diesel power stations. Electricity supply is currently reserved for public sector investment, but may
change in the future.1 Petroleum products consumption is equal to 7.2% of total energy consumption, but accounts
for 50% of foreign exchange spent every year. Thus, it is a main objective of the sector to develop adequate
domestic substitutes for imported petroleum products.2
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