WHITE PAPER

Natural gas resources in Tanzania and Mozambique have emerged as a new source of gas supply. While they are poised for export to global gas markets, they can also provide a key source of energy to the rest of Eastern Africa (defined in this paper to include Burundi, Ethiopia, Kenya, Malawi,Mozambique, Rwanda, South Africa, Tanzania, and Uganda), where millions of inhabitants are currently living without access to electricity and clean cooking. Natural gas could also potentially be a driver for industrialization and economic growth. But before delving into the potential gas demand and opportunities for gas utilization in the region, it is important to take a step back to analyze the current energy picture in Eastern Africa and look into the social and development plans in place in the region.
Despite large natural resource potential across the region of Eastern Africa (except South Africa), low electricity access and energy access rates have hampered economic growth and increased dependency on traditional biomass. This scoping study investigates energy access issues in the residential, industrial and transport sectors. We find that:
Almost all the socio-economic development plans of the nine countries in this study include the development of energy resources and electricity access as an instrument to promote growth. However, the rollout of planned power capacity additions has been slow, and countries are unlikely to reach their respective capacity targets.

Reasons for low energy access vary but are tied mostly to the financial capacity of governments, inadequate revenues for utilities, tariffs being lower than costs, and a weak regulatory framework to implement energy policies.
Penetration of prepaid meters in households offers benefits to utilities and consumers in terms of payment collection and flexibility respectively. Almost all governments in Eastern Africa have committed to policies to support the widespread installation of prepaid meters, which will be a key driver of increased electricity access.

Economic growth and development hinges on the industrial sector having access to reliable and affordable energy. Industrial and energy access policies have to be interlinked to spur economic activities in each country and to maximize the benefits of energy access.

Urbanization and population growth are key drivers to improving energy access in the transport sector. The biggest challenge facing this sector has been poor infrastructure. Development policies oriented toward urbanization and the growth of cities must link with transportation policies to adequately expand transport infrastructure and increase other modes of transport, including mass transportation.