The Zanzibar Utilities Regulatory Authority (ZURA) is a multi-sector regulatory entity that regulates the water, electricity, and petroleum industries on the Islands of Zanzibar.
ZANZIBAR, Tanzania – Zanzibar is a small island about 20 miles off the Tanzanian mainland in East Africa. Nestled in the Indian Ocean, this semi-autonomous tropical nation, known as “Spice Island” is home to close to 1.5 million inhabitants.
The Zanzibar Utilities Regulatory Authority (ZURA) was created in 2013 under the Ministry of Water, Energy, and Minerals of the Revolutionary Government of Zanzibar to serve as a regulatory body, for the ever-growing water, energy, and petroleum sectors on the Island.
ZURA facilitates and encourages private sector participation in investments in public utilities. It also protects the interests of utilities consumers and providers. The authority is responsible for ensuring that the services provided to users are affordable, safe, reliable, and available at adequate levels, and that service providers see a fair return on their investments.
Conditions in Zanzibar show great potential for investment in the energy and petroleum sectors. This has, in turn, seen ZURA create an investment portfolio that guides investors on the opportunities Zanzibar has to offer in the energy and petroleum sectors.
Electricity
The supply of electricity plays an important role in Zanzibar’s strategy for growth and reduction of poverty. Currently, Zanzibar Electricity Cooperation (ZECO), which is a vertically integrated utility, wholly owned by the Government, supplies most of the electricity in Zanzibar. The conditions in the country however show great potential for renewable energy such as wind and solar.
ZURA’s role and regulation of the electricity sector include:
• Issuing licenses
• Formulating and enforcing codes and standards
• Reviewing and setting electricity rates and charges
• Approving Power Purchase Agreements (PPAs)
• Ensuring the security of supply and energy efficiency
• Promoting effective competition and economic efficiency.
Zanzibar has designated areas in Unguja and Pemba islands for investment in Solar and Wind Energy. The Government has reserved land for renewable power generation plants on the islands.
Petroleum
In recent years, Zanzibar has experienced vast economic growth with multiple project developments for both public and private investors, key growth in the GDP, and increased tourist activities. These factors have led to a steep increase in the demand for petroleum products. Zanzibar has experienced an annual increase of estimated 10 per cent demand for all petroleum products.
The current storage capacity at the existing fuel terminal is 16 million liters. The desired capacity to fulfill the rising demand is 32 million litres.
Cooking gas
ZURA has consequently identified and secured a site in the Bumbwini /Mangapwani region of the main Island of Unguja, which is approximately 380 hectares. It is approximately 22 kilometers north of the existing Mtoni fuel terminal.
More than 60 hectares of land shall be reserved for the development of liquified Petroleum gas (LPG), and liquid natural gas (LNG) tank farms for private investment. Zanzibar aims to build a storage facility to meet the national strategic reserve, and storage for petroleum products that could be resupplied to neighboring countries and ports – considering Zanzibar’s strategic geographic location in East Africa.
Liquefied Petroleum Gas (LPG)
LPG in Zanzibar Islands has shown a remarkable change in the acceptability of the LPG as a major cooking power for a household, hereafter the steady growing demand for LPG has been increasing day by day due to its convenience and adaptability. The evolution of major household cooking necessity has been from fire wood to charcoal, to electricity and currently to LPG.
LPG has ignited its demand with the increase of LPG retail shops in almost every street corner and even some remote or rural areas.
The consumption of LPG varies from household to household depending on various factors including the level of needs in commercial and domestic basis.
The accessibility of Zanzibar LPG market; the average penetration in the Zanzibar market is 15 per cent. This means there is much more potential in market penetration and the suppliers are well equipped to demand LPG growth in Zanzibar.
ZURA offers a wide range of opportunities for investors in the Energy sector. This Portfolio will act as a tool that will link the Regulator with the Potential Investors Petroleum and Energy Sectors.