Tanzania is inching closer to finalizing a $42 billion liquefied natural gas (LNG) deal, aiming to solidify its position as an energy hub in East Africa. Finance Minister Khamis Mussa Omar announced that negotiations are nearly complete, though the agreement was initially expected to be signed before June. The project, spearheaded by Equinor and Shell, is set to tap into 47.13 trillion cubic feet of natural gas reserves, with participation from ExxonMobil, Pavilion Energy, Medco Energi, and Tanzania Petroleum Development Corporation.
While most of the gas will be exported, a portion will be reserved for domestic use. This initiative aligns with Tanzania's broader strategy to expand its energy sector, complementing Uganda's plans to start oil exports through Tanzania's port of Tanga by early 2027. The East African nation also aims to nearly double its electricity generation capacity to 8,000 megawatts by 2030, with a focus on increasing clean energy sources like hydropower, solar, wind, and natural gas to around 75% of its energy mix.
To support these ambitions, Tanzania is attracting international capital into revenue-generating projects and opening its domestic debt market to foreign investors. Reforms this year have enhanced foreign access to domestic bonds and encouraged corporate debt issuance. The government is also considering a new International Monetary Fund lending program, with a decision expected by June, following the conclusion of its previous $1.7 billion program in July.