U.S. firm seeks $561 million from Tanzania in power supply dispute

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By Fumbuka Ng’wanakilala | DAR ES SALAAM

DAR ES SALAAM Symbion Power is seeking $561
million from Tanzania’s state power supplier TANESCO via
international mediation, accusing it of breach of contract, the
U.S. firm said on Tuesday.

Symbion owns a 120 MW thermal power plant in Tanzania’s
commercial capital Dar es Salaam and is one the handful of
independent producers that sell power to state-owned utility
Tanzania Electric Supply (TANESCO).

Tanzania has reserves of over 57 trillion cubic feet (tcf)
of natural gas but faces chronic power shortages due its
reliance on hydro-power dams in a drought-prone region, forcing
its utility to buy from the private firms.

Symbion’s spokesperson Julie Foster said it sued TANESCO at
the International Chamber of Commerce’s International Court of
Arbitration in Paris on March 13, saying it had failed to honour
a 15-year agreement.

“The power purchase agreement is now terminated and the
amount claimed is $561 million. Since the case is a very simple
case to adjudicate, we hope that it will not take too long for
the arbitration to come to a conclusion,” Foster told Reuters.

Foster said Symbion filed for arbitration because it ran out
of options “after trying to resolve the dispute … in a
friendly manner for more than a whole year.”

TANESCO declined to comment, saying the matter was under
court proceedings.

Tanzanian president John Magufuli, nicknamed “the Bulldozer”
for his infrastructure projects and strict leadership style,
launched his reform drive after he was elected in 2015,
promising to transform an economy hobbled by bureaucracy and
corruption.

But some foreign investors have said they could scale back
their operations or expansion plans because of tougher demands,
including higher tax bills, as part of the president’s drive to
overhaul the economy.

“The concern however is that such short-term thinking, and
ensuing polices, only reinforces a growing investor sentiment
that Magufuli’s government is anti-business,” Ahmed Salim, vice
president of consultancy Teneo Intelligence, said in a note to
clients on March 6. (Editing by Aaron Maasho/Ruth Pitchford)



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