Tanzania Energy Sector: Legal and Regulatory Framework

The energy sector is a fundamental pillar of socio-economic development in any modern state. In Tanzania, it plays a vital role in driving industrialisation, attracting investment, promoting rural electrification, and supporting overall national growth. Access to reliable and affordable energy is essential not only for economic productivity but also for improving citizens’ quality of life through better access to education, healthcare, communication, and other social services. As the country continues to experience rapid population growth, urbanisation, and economic expansion, the demand for energy is increasing, underscoring the need for an effective and well-structured regulatory framework. In response, the Government of Tanzania has established a comprehensive legal and regulatory framework to govern the energy sector. This framework covers the exploration, production, generation, transmission, distribution, and consumption of energy resources, and is designed to ensure efficiency, sustainability, reliability, affordability, and security of supply. It also promotes investment, private sector participation, and consumer protection, thereby creating a stable and predictable environment for the development of the sector

2. Overview of the Energy Sector in Tanzania

Tanzania’s energy sector is composed of several interrelated sub-sectors, including electricity, petroleum, natural gas, and renewable energy. The electricity sub-sector covers power generation, transmission, distribution, and supply to consumers, while the petroleum industry is divided into upstream, midstream, and downstream operations. The natural gas sub-sector has increasingly become central to Tanzania’s energy mix, particularly in electricity generation and industrial use, following major offshore and onshore gas discoveries. At the same time, renewable energy sources such as solar, wind, biomass, geothermal, and hydropower continue to gain importance, particularly in rural and off-grid communities where access to the national grid remains limited.

Over the years, the energy sector has undergone significant reforms aimed at improving operational efficiency, encouraging competition, and attracting private investment. Historically, the sector was dominated almost entirely by state-owned entities, particularly the Tanzania Electric Supply Company Limited (TANESCO). However, reforms introduced through various laws and policies have opened the sector to private participation, especially in electricity generation and petroleum-related activities. These reforms have contributed to increased investment in energy infrastructure and enhanced electricity generation capacity.

One notable development has been the increasing involvement of Independent Power Producers (IPPs) in electricity generation. IPPs are private companies licensed to generate electricity and sell it to TANESCO or directly to eligible consumers through contractual arrangements such as Power Purchase Agreements (PPAs). The participation of IPPs has helped supplement government efforts in addressing power shortages, diversifying energy sources, and mobilising capital for energy infrastructure development. Examples of IPP involvement in Tanzania include natural gas-fired power plants and renewable energy projects that contribute electricity to the national grid. Their participation reflects the government’s broader policy objective of liberalising the electricity market while maintaining regulatory oversight through institutions such as EWURA.

In addition, Tanzania has progressively reduced its dependence on hydropower, which is vulnerable to climate variability and drought, by increasing the utilisation of natural gas for electricity generation. The government also continues to promote renewable energy development as part of its long-term strategy for sustainable and environmentally friendly energy development.

3. Policy Framework

3.1 National Energy Policy, 2015

The National Energy Policy, 2015 was adopted by the Government of Tanzania to replace the 2003 Policy and address emerging developments in the energy sector, including increasing energy demand, technological advancements, natural gas discoveries, and the need for greater private-sector participation. The Policy provides a framework for the sustainable development and management of the energy sector, with the objective of ensuring reliable, affordable, accessible, efficient, and environmentally sustainable energy services. It supports broader national goals of industrialisation, economic growth, poverty reduction, and social development, in line with the Tanzania Development Vision 2025. The Policy also strengthens institutional governance by defining the roles of government, regulators, and private sector actors, while assigning regulatory oversight to the Energy and Water Utilities Regulatory Authority (EWURA).

A key feature of the Policy is its promotion of private investment through public-private partnerships, Independent Power Producers (IPPs), transparent procurement processes, and cost-reflective tariffs to support energy infrastructure development. It prioritises increasing electricity generation capacity, improving transmission and distribution networks, and expanding access to electricity, particularly in rural areas through the Rural Energy Agency (REA). In the petroleum and natural gas sectors, the Policy focuses on energy security, efficient storage and distribution systems, local content participation, and value addition through industrial utilisation of natural gas resources. It also addresses environmental sustainability, gender inclusion, research and development, capacity building, and regional cooperation, while encouraging greater participation of Tanzanians in opportunities arising from energy projects.

4. Legal Framework Governing the Energy Sector

4.1 Energy and Water Utilities Regulatory Authority Act, Cap. 414

The Energy and Water Utilities Regulatory Authority Act establishes the Energy and Water Utilities Regulatory Authority (EWURA) as the principal regulatory body responsible for overseeing the energy and water sectors in Tanzania Mainland. Under section 4 of the Act, EWURA is formally established as an autonomous regulatory authority, while section 5 grants it the status of a body corporate with perpetual succession and a common seal.

As a corporate body, EWURA has legal capacity to sue and be sued, acquire, hold, and dispose of movable and immovable property, enter into contracts and other transactions, and perform all acts necessary for the proper execution of its statutory functions. This corporate status enables the Authority to operate independently and effectively in carrying out its regulatory responsibilities.

EWURA is mandated to regulate electricity, petroleum, natural gas, and water utilities through both technical and economic regulation. Its responsibilities include issuing licences, approving tariffs and fees, monitoring service quality, ensuring compliance with standards, resolving disputes, and protecting consumer interests. The Authority also promotes fair competition and operational efficiency within regulated sectors.

In the electricity sector, EWURA regulates generation, transmission, distribution, supply, and trade in electricity. It reviews and approves tariffs charged by electricity suppliers, monitors the performance of licensees, and ensures compliance with safety and technical standards. In the petroleum sector, EWURA regulates midstream and downstream petroleum activities, including importation, transportation, storage, wholesale, and retail operations. The Authority also monitors fuel pricing mechanisms and ensures the security of petroleum supply within the country.

Furthermore, EWURA possesses rule-making powers that enable it to issue regulations, rules, codes of conduct, guidelines, and standards necessary for effective regulation of the sector. Through these powers, EWURA plays a central role in ensuring transparency, accountability, efficiency, and sustainability in Tanzania’s energy sector.

4.2 Electricity Act, Cap. 131 [R.E. 2023]

The Electricity Act provides the principal legal framework governing the electricity supply industry in Tanzania. The Act regulates electricity generation, transmission, transformation, distribution, supply, and trade within the country. It establishes licensing requirements for electricity operators and sets standards relating to safety, technical operations, and service delivery.

The Act also supports liberalisation of the electricity sector by facilitating private sector participation through mechanisms such as Independent Power Producers (IPPs), Small Power Producers (SPPs), and public-private partnerships. Through Power Purchase Agreements, private companies are allowed to generate electricity and supply it to TANESCO or directly to eligible consumers, subject to regulatory approval.

Additionally, the Act promotes rural electrification and encourages investment in renewable energy projects. It empowers EWURA to regulate the electricity market and ensure that electricity services are delivered efficiently, reliably, and safely to consumers across Tanzania.

4.3 Petroleum Act, 2015 [Cap. 392 R.E. 2023]

The Petroleum Act establishes a comprehensive legal framework governing petroleum and natural gas activities in Tanzania. The Act regulates upstream, midstream, and downstream petroleum operations, thereby ensuring coordinated and effective management of petroleum resources.

Under section 11 of the Act, the Petroleum Upstream Regulatory Authority (PURA) is established to regulate and monitor upstream petroleum activities in Mainland Tanzania. The Act grants PURA authority over exploration, appraisal, development, production, and decommissioning activities related to petroleum and natural gas resources.

The Act also addresses issues relating to licensing, local content, resource management, environmental protection, transparency, and accountability. Its objective is to ensure that Tanzania’s petroleum resources are exploited in a manner that maximises national benefit and contributes meaningfully to economic development.

4.4 The Water Supply and Sanitation Act, 2019 [R.E. 2023]

The Water Supply and Sanitation Act, Cap 272 (Revised Edition 2023), establishes the legal framework for the provision, management, and regulation of water supply and sanitation services in Mainland Tanzania. Its primary objective is to ensure access to safe, reliable, affordable, and sustainable water and sanitation services for all. The Act is guided by key principles such as sustainability, decentralisation, public participation, environmental protection, and the promotion of public health. It also encourages institutional autonomy and private sector participation in service delivery, while recognising access to clean water and proper sanitation as essential for socio-economic development.

The Act creates and regulates several key institutions responsible for water service delivery. These include Water Supply and Sanitation Authorities (WSSAs), which operate mainly in urban areas, and the Rural Water Supply and Sanitation Agency (RUWASA), which oversees rural water services. It also recognises Community-Based Water Supply Organisations (CBWSOs), which manage local water schemes at the community level. Additionally, the Act establishes the National Water Fund to support financing of water projects, especially in underserved areas. Regulatory oversight is vested in the Energy and Water Utilities Regulatory Authority (EWURA), which is responsible for licensing, tariff approval, monitoring service quality, and protecting consumer interests.

The Act further outlines the powers and duties of service providers, including the obligation to ensure water quality, maintain infrastructure, provide sewerage and sanitation services, and respond to consumer needs. It contains provisions on consumer rights, requiring fair billing, reliable service, and accessible complaint mechanisms. At the same time, it establishes offences and penalties for acts such as illegal connections, water pollution, and destruction of infrastructure. Emphasis is also placed on financial sustainability through cost-recovery mechanisms and proper management of resources. Overall, the Act provides a comprehensive system that balances efficient service delivery, regulatory control, environmental conservation, and community involvement in the water sector.

4.5 The Petroleum (Local Content) Regulations, 2017 [ R.E. 2023]

The Petroleum (Local Content) Regulations, 2017 are subsidiary legislation made under the Petroleum Act, 2015 (Cap. 392, Revised Edition 2023). Their main purpose is to ensure that petroleum activities, such as exploration, development, and production of oil and gas, generate meaningful benefits for Tanzanians. The Regulations define “local content” as the value added to the national economy through the use of Tanzanian labour, goods, services, and capital. In essence, they legally require companies operating in the petroleum sector to prioritise Tanzanian participation rather than relying heavily on foreign resources.

These Regulations play a crucial role in shaping how the petroleum sector contributes to national development. They require companies to employ Tanzanians, procure goods and services from local suppliers, and invest in training and technology transfer to build local capacity. Additionally, they encourage partnerships between foreign investors and Tanzanian companies, ensuring local ownership and participation in petroleum projects. Through requirements such as Local Content Plans and regular reporting, the law ensures accountability and continuous monitoring by regulatory authorities. This framework helps Tanzania avoid a situation where natural resources are extracted without benefiting its citizens.

Overall, the Regulations are a key tool for economic empowerment and sustainable development in Tanzania. They promote job creation, strengthen local industries, and support the growth of skilled professionals in the oil and gas sector. By balancing foreign investment with national interests, the Regulations ensure that the country’s petroleum resources contribute to long-term economic growth and improved livelihoods for Tanzanians, rather than benefiting only external investors.

4.6 The Petroleum (Pipeline Operations) Rules, 2015

 The Petroleum (Pipeline Operations) Rules, 2015 were enacted under the Petroleum Act, 2015 to regulate the construction, operation, maintenance, safety, and decommissioning of petroleum pipelines in Mainland Tanzania. Administered by the Energy and Water Utilities Regulatory Authority (EWURA), the Rules establish a comprehensive framework for the transportation, handling, storage, and distribution of petroleum products through pipelines. A key feature of the Rules is the licensing regime, which requires any person seeking to construct or operate a petroleum pipeline facility to obtain a licence from EWURA and demonstrate technical, financial, environmental, and safety compliance. Licensees are required to operate in accordance with applicable laws, technical standards, and good petroleum industry practices, while maintaining accurate records and reporting accidents, leaks, spills, and other emergencies to EWURA.

The Rules place significant emphasis on health, safety, environmental protection, and operational integrity. Pipeline operators must implement safety and environmental management systems, maintain emergency response plans, conduct regular inspections and maintenance, and take all necessary measures to prevent harm to people, property, and the environment. EWURA is empowered to inspect facilities, investigate incidents, issue compliance orders, and impose sanctions for non-compliance, including fines, suspension, or revocation of licences. The Rules also provide for operator liability and compensation for damage arising from pipeline operations and require proper decommissioning of facilities when operations cease. Overall, the Rules operationalise the objectives of the Petroleum Act, 2015 by promoting safe, efficient, environmentally responsible, and secure petroleum transportation in Tanzania.

4.7 The Petroleum (Bulk Procurement) Regulations, 2017

The Petroleum (Bulk Procurement) Regulations, 2017 establish the legal framework for implementing the Bulk Procurement System (BPS) in Tanzania under the Petroleum Act, Cap. 392. The main purpose of these Regulations is to centralise the importation of petroleum products such as petrol, diesel, and Jet A1 through a single coordinated system managed by the Petroleum Bulk Procurement Agency (PBPA). Instead of individual Oil Marketing Companies importing fuel separately, the system pools national demand and procures petroleum in bulk through international competitive bidding. This approach is intended to reduce import costs, enhance efficiency, ensure a continuous fuel supply, and improve transparency in the petroleum supply chain.

Under these Regulations, PBPA plays a central role as the implementing authority. It is responsible for collecting demand from Oil Marketing Companies, conducting international tenders to select suppliers, negotiating and signing supply contracts, and overseeing the delivery of petroleum products into Tanzania. Other key institutions, such as EWURA, TRA, TPA, and TBS, support the system by regulating pricing, taxation, port operations, and quality standards. All licensed Oil Marketing Companies are required to participate in the system, and petroleum products must meet strict quality requirements while complying with import, payment, and distribution procedures set under the Regulations.

Overall, the Regulations aim to ensure that petroleum procurement in Tanzania is conducted in a transparent, competitive, and well-coordinated manner. By centralising procurement, the government seeks to achieve economies of scale, stabilise fuel supply, and prevent inefficiencies that could arise from fragmented imports. The system also strengthens oversight and accountability in the petroleum sector while ensuring that fuel reaching the market meets national quality and safety standards.

4.8 The Rural Energy Act, 2005 [R.E. 2023]

The Rural Energy Act establishes the legal and institutional framework for promoting access to modern energy services in rural areas of Mainland Tanzania. Its main objective is to address the long-standing disparity in energy access between urban and rural communities by facilitating electrification and the use of modern energy for socio-economic development. The Act recognises that reliable and affordable energy is essential for improving livelihoods, supporting productive economic activities, and enhancing access to services such as education and healthcare. It also promotes the use of renewable energy sources and encourages participation from the private sector, local communities, and development partners.

The Act creates three key institutions to implement its objectives: the Rural Energy Agency (REA), the Rural Energy Fund (REF), and the Rural Energy Board (REB). The REA serves as the main implementing body responsible for promoting, coordinating, and facilitating rural energy projects, including mobilising investment and providing technical support. The REF acts as a financial mechanism that provides grants, subsidies, and other funding to support rural energy initiatives, especially those that are not commercially viable on their own. The REB, on the other hand, oversees the overall governance of the sector by approving plans, supervising the Fund, and ensuring accountability and proper implementation of rural energy policies and programmes.

In addition, the Act defines the roles of the Minister responsible for energy, who provides policy direction and oversight, and the Director General of REA, who manages the day-to-day operations of the Agency. It also establishes guiding principles such as sustainability, efficiency, and stakeholder participation in rural energy development. The Act works alongside other energy laws, particularly the Electricity Act and the law establishing the Energy and Water Utilities Regulatory Authority (EWURA), which handles licensing and regulation of energy activities. Overall, the Rural Energy Act is a crucial legal tool for expanding rural electrification, attracting investment, and supporting Tanzania’s broader development goals.

4.9 The Environmental Management Act, 2004

The Environmental Management Act provides the legal basis for environmental protection and sustainable development in Tanzania. The Act requires energy projects to undergo Environmental Impact Assessments (EIAs) before implementation to identify and mitigate potential environmental and social impacts.

The Act promotes sustainable utilisation of natural resources, conservation of ecosystems, pollution control, and environmental compliance. Consequently, environmental sustainability forms an integral component of energy sector regulation and project implementation in Tanzania.

5. Institutional and Regulatory Framework

5.1 The Role of EWURA in Tanzania’s Energy Sector

The Energy and Water Utilities Regulatory Authority (EWURA) is one of the most significant regulatory institutions within Tanzania’s energy sector. Established under section 4 of the EWURA Act, the Authority operates as an independent and autonomous regulatory body responsible for overseeing electricity, petroleum, natural gas, and water services in Mainland Tanzania.

Section 5 of the Act grants EWURA corporate legal status, enabling it to sue and be sued, enter into contracts, acquire property, and perform all functions necessary for effective discharge of its mandate. The independence granted to EWURA is particularly important in ensuring impartial decision-making and promoting investor confidence within the sector.

EWURA performs both economic and technical regulatory functions. Economically, the Authority regulates tariffs and pricing mechanisms to ensure that consumers are protected from unfair pricing while at the same time enabling investors and service providers to recover operational costs and earn reasonable returns. Technically, EWURA ensures compliance with operational, safety, environmental, and quality standards across the sector.

Among its major functions is the issuance, renewal, suspension, and revocation of licences for operators engaged in electricity generation, transmission, distribution, petroleum importation, transportation, storage, and natural gas activities. EWURA also monitors the performance of licensees to ensure compliance with licence conditions and statutory obligations.

In addition, EWURA plays an important role in consumer protection by handling complaints and disputes between consumers and service providers. It establishes standards for quality of service and ensures that regulated entities comply with those standards. The Authority also promotes competition and private sector participation by creating a transparent and predictable regulatory environment that encourages investment.

In the petroleum sector, EWURA regulates midstream and downstream activities, including fuel transportation, storage, wholesale, and retail distribution. It also oversees petroleum pricing structures and monitors fuel supply systems to ensure availability and stability within the market.

Through its rule-making powers, EWURA issues regulations, guidelines, codes, and procedures that govern operational conduct within the energy sector. Consequently, the Authority remains central to ensuring accountability, efficiency, transparency, and sustainability in Tanzania’s energy industry.

5.1.1 Permits and Licences under Ewura (upstream sector)

Section 7 of the EWURA Act provides for the functions of the Authority, one of which, under Section 7(1)(b)(i), is the issuance, review, and cancellation of licences. The licences issued by the Energy and Water Utilities Regulatory Authority (EWURA) relate to the electricity sector under the Electricity Act, the petroleum sector under the Petroleum Act, and the water supply and sanitation sector under the Water Supply and Sanitation Act of 2019. EWURA also issues ancillary or support approvals depending on the nature of regulated activities.

 5.1.2 Electricity Sector Licences

Under Section 8(1) of the Electricity Act, various electricity-related activities require a licence from EWURA. These include electricity generation, transmission, distribution, supply, system operation, cross-border electricity trade, physical and financial electricity trading, and electrical installation services. Any person intending to engage in these activities must obtain the relevant licence or permit from EWURA before commencing operations.

In considering an application for a licence, EWURA takes into account several key factors, including the contribution of the proposed activity to meeting future electricity demand, consistency with the national power system expansion plan and rural electrification strategies, and the extent to which the activity promotes competitive conditions in the electricity supply industry. The Authority also assesses social and environmental impacts, effects on public and employee health and safety, and the legal, technical, financial, and economic capacity of the applicant. Further considerations include cost implications, potential effects on electricity prices, public objections or representations, and any other public interest factors that may be affected.

A licence issued by EWURA typically contains the name and address of the licensee, the licence term, the licensed activities, tariff determination basis, reporting obligations, the area of operation, and other technical, financial, and regulatory requirements as may be prescribed by the Authority.

Under the Electricity Act, 2008, any person or entity wishing to undertake electricity-related activities in Tanzania must obtain a licence from EWURA. The Act primarily covers generation, transmission, distribution, bulk supply, import and export of electricity, and cross-border electricity trade. However, certain small-scale activities may be exempt depending on thresholds set in the regulations.

To qualify for a licence, an applicant must be a legally registered entity with adequate technical, financial, and operational capacity. This includes qualified personnel, appropriate infrastructure, and a viable business plan or feasibility study demonstrating sustainability of the proposed project. The applicant must also comply with environmental laws, including requirements for an Environmental and Social Impact Assessment (ESIA) where applicable.

Once an application is submitted, EWURA conducts a technical, financial, and legal evaluation, which may include public consultation before a final decision is made. If approved, the licence is issued subject to specific conditions, including compliance with safety and technical standards, tariff regulations, reporting obligations, and regulatory inspections. Non-compliance may result in suspension or revocation of the licence.

 5.1.3 Water Supply and Sanitation Licences

Under the Water Supply and Sanitation Act, 2019, the regulation and licensing of water supply and sanitation services is overseen by EWURA. Any person or entity intending to provide such services is required to obtain a licence prior to commencement of operations. The objective is to ensure that water and sanitation services are delivered safely, efficiently, and in compliance with public health and environmental standards. The licensing framework also enables EWURA to regulate service quality, tariffs, technical standards, and legal compliance.

The Act provides for different categories of licences depending on the nature and scale of services, including water supply services, sewerage and sanitation services, and other regulated water utility operations. Licences are typically issued to water authorities, private operators, companies, or institutions that meet the prescribed legal, technical, and financial requirements.

A licence authorises the holder to construct, operate, maintain, and manage water supply or sanitation systems within a specified area, subject to defined conditions.

The application process begins with submission of an application to EWURA using the prescribed forms. Applicants are required to submit supporting documents, including company registration certificates, technical proposals, financial capability evidence, environmental and safety compliance documents, and details of the proposed area of operation.

EWURA reviews the application to assess whether the applicant has the capacity to deliver services in the public interest. The Authority may request additional information, conduct inspections, or engage in consultations where necessary.

Upon completion of the evaluation, EWURA may approve or reject the application. Where successful, the applicant is issued a licence upon payment of the prescribed fees and acceptance of licence conditions. These conditions generally relate to service quality, infrastructure maintenance, reporting obligations, consumer protection, tariff compliance, and environmental management. Failure to comply may result in suspension, cancellation, or non-renewal of the licence.

5.1.4 How to Apply for a Licence Through Ewura

1. Applications for licences under EWURA in Tanzania are submitted through the EWURA e-Services platform, an online system introduced on 2 March 2026.
2. The application process begins by accessing the EWURA online portal and selecting the appropriate licence category, such as electricity, petroleum, or natural gas upstream, midstream, or downstream activities.
3. Applicants are required to prepare and upload relevant documentation, including company registration documents, Taxpayer Identification Number (TIN), technical capability documents, and financial statements or reports.
4. The applicant then completes the online application form and pays the prescribed non-refundable application fees. After submission, EWURA reviews the application, conducts a pre-licensing inspection where necessary, and may publish the application in local newspapers for public comments.
5. The Authority aims to make a decision within approximately 60 days from the date of submission, subject to completeness of documentation and compliance with requirements.
6. For electrical installers, additional requirements include submission of academic certificates, a curriculum vitae (CV), and a passport-size photograph with a blue background.

5.2 The Role of PURA in Tanzania’s Energy Sector

The Petroleum Upstream Regulatory Authority (PURA) is the principal institution responsible for regulating upstream petroleum activities in the Tanzania Mainland. It was established under section 11 of the Petroleum Act, 2015 (Revised Edition 2023) as an autonomous body corporate with legal capacity to perform its functions independently.

PURA regulates activities relating to petroleum exploration, appraisal, development, production, and decommissioning. Its primary responsibility is to ensure that upstream petroleum operations are conducted in accordance with the law, international best practices, safety standards, and national interests.

The Authority advises the Government on upstream petroleum matters, including licensing, resource management, and policy implementation. It is also responsible for reviewing applications for exploration and production licences, monitoring compliance with licence terms, evaluating petroleum reserves, and supervising petroleum operations undertaken by contractors and investors.

One of Pura’s critical responsibilities is ensuring that Tanzania derives maximum benefit from its petroleum resources. In this regard, the Authority promotes local content participation by encouraging the involvement of Tanzanian citizens and local companies in petroleum projects through employment, training, procurement, and technology transfer.

PURA also plays an important role in ensuring operational safety and environmental protection in upstream petroleum activities. It monitors compliance with health, safety, and environmental standards and works closely with other government institutions responsible for environmental management and natural resource governance.

Furthermore, PURA contributes to transparency and accountability in the petroleum industry by ensuring proper monitoring of production activities, costs, and revenues associated with petroleum operations. As Tanzania continues to expand its natural gas industry, PURA remains a crucial institution in safeguarding national interests and ensuring sustainable exploitation of petroleum resources.

The authority responsible for granting petroleum licences in Tanzania is the Minister responsible for Energy. Section 43 of the Petroleum Act [R.E. 2023] empowers the Minister to grant petroleum licences. However, in exercising this power, the Minister is required to consider the advice of the Petroleum Upstream Regulatory Authority (PURA).

5.2.1 Permits and Licences under Pura (upstream sector)

PURA plays a key regulatory role in the upstream petroleum sector. Its responsibilities include reviewing applications for exploration and production licences, monitoring compliance with licence terms, evaluating petroleum reserves, and supervising petroleum operations undertaken by contractors and investors.

The licences under PURA are categorised into different types, as explained below.

• Reconnaissance Permit

A Reconnaissance Permit is a legal authorisation issued by PURA that allows a person or company to conduct preliminary petroleum surveys and investigations in a specified area before full exploration begins. This represents the first stage of petroleum exploration, where companies collect geological and geophysical data to determine the potential presence of oil or natural gas.

A person intending to carry out reconnaissance surveys must apply to PURA for a permit. The application process is governed by the Petroleum (Reconnaissance and Tendering) Regulations, 2019, GN No. 958 (as amended by G.N. No. 270 of 2023). Regulation 4(1) provides that a person intending to carry out a reconnaissance survey shall apply to the Authority for a reconnaissance permit. Where the applicant is an individual, the application must include full name, nationality, physical address, and postal address. Where the applicant is a body corporate, it must include the corporate name, place of incorporation, names and nationalities of directors, as well as supporting documents and certificates.

Under section 35 of the Petroleum Act, the duration of a reconnaissance permit shall not exceed three years unless otherwise determined by PURA. Furthermore, section 36 requires PURA to issue the permit within ninety days after receipt of a complete application.

A reconnaissance permit may allow specific types of surveys and, in some cases, shallow drilling for data calibration purposes. Where permits are issued to more than one person in the same area, each permit holder must ensure that their activities do not interfere with or prejudice the activities of others. Where reconnaissance activities are conducted in environmentally sensitive areas such as wildlife habitats, marine parks, game reserves, or other reserved areas, such activities must take into account ecological considerations, including breeding and migratory patterns of wildlife.

A reconnaissance permit must specify the date of issuance, the area covered, the type of data to be collected, the conditions attached to the permit, and the duration of confidentiality of collected data, as provided under section 34(5) of the Petroleum Act. No reconnaissance activities may commence until the holder has complied with environmental protection requirements as prescribed under the Environmental Management Act.

• Exploration Licence

An Exploration Licence is applied for by the Tanzania Petroleum Development Corporation (TPDC) on behalf of investors. The application is submitted to the Minister responsible for Energy. The application must be accompanied by a proposed work programme and minimum expenditure commitments for the relevant block. A “block” is defined under section 32 of the Petroleum Act as an area of potential petroleum accumulation divided into particular sections.

The application must also include:

1. Details of the applicant’s technical and petroleum industry qualifications;
2. Information on technical and petroleum industry resources available to the applicant;
3. Financial capability, including capital, credit facilities, and guarantees;
4. A local content plan detailing training and employment of Tanzanian citizens;
5. Any other relevant information the applicant wishes the Minister to consider.
6. An exploration application may cover not more than 40 blocks.

Within sixty days of receiving the application, the Minister must notify the applicant of the decision to grant or refuse the licence, based on the advice of PURA. Where granted, the exploration licence must specify the date of issuance, the exploration area, the terms and conditions of the licence, the identity of the contractor and operator (where applicable), and all relevant conditions attached to the licence. Under section 56 of the Petroleum Act, the exploration licence is valid for a period not exceeding four years from the date of grant.

Additionally, the licence holder is required, not later than one month before each anniversary of the licence, to submit to PURA a detailed programme of work and expenditure for the following year. Such submitted programme becomes part of the licence obligations.

• Development Licence

A Development Licence may be applied for by the holder of an exploration licence within two years in the case of crude oil, or three years in the case of natural gas, from the date the block is declared a discovery location, or within such extended period as the Minister may allow.

The holder may apply for a development licence in respect of any block within the exploration area if the Minister is satisfied that the block contains a petroleum reservoir or part of a petroleum reservoir; and the block does not, at the time of application, constitute a designated location. Section 67 of the Petroleum Act requires that an application for a development licence be accompanied by a development plan. The development plan must include:

• Proposals for the development and production of the petroleum reservoir, including methods for the use or disposal of associated gas;
• Detailed proposals for the construction and establishment of facilities and services related to the recovery, processing, storage, and transportation of petroleum from the development area;
• Any other requirements prescribed under the Act.

5.2.2 How to Apply for a Licence through PURA

• An application to PURA under the Petroleum Act, Cap. 392 begins with identifying the specific type of licence required, such as reconnaissance, exploration, development, or production.
• The applicant must prepare a comprehensive submission demonstrating legal status, technical expertise, and financial capacity. This includes company registration documents, a proposed work programme, proof of financial resources, environmental compliance plans, and local content commitments.
• Once prepared, the application is submitted to PURA in the prescribed format together with all supporting documents and applicable fees. PURA then evaluates the application by assessing technical competence, financial capability, legal compliance, and national interest considerations. Where necessary, PURA may request additional information or clarification.
• After completing its assessment, PURA submits its recommendations to the Minister responsible for petroleum. If the application is approved, the licence is granted subject to specific terms and conditions.
• The licence holder must thereafter comply with ongoing obligations, including operational requirements, reporting duties, environmental standards, and other regulatory conditions throughout the lifecycle of the petroleum project.

6.  Other Key Institutions

6.1 The Ministry of Energy serves as the central government authority responsible for overall policy direction, strategic planning, and coordination of Tanzania’s energy sector. It formulates policies, strategies, and development plans aimed at ensuring sustainable energy development and alignment with national socio-economic goals. It also coordinates institutions such as EWURA, PURA, TANESCO, TPDC, and REA, and represents Tanzania in regional and international energy cooperation.

6.2 Tanzania Electric Supply Company Limited (TANESCO) is the state-owned entity responsible for electricity generation, transmission, distribution, and supply in Mainland Tanzania. It operates the national grid and purchases electricity from Independent Power Producers under the single buyer model.

6.3. Tanzania Petroleum Development Corporation (TPDC) is the National Oil Company responsible for managing the Government’s commercial interests in the petroleum sector. It participates in exploration, development, production, and marketing of petroleum resources and plays a strategic role in natural gas development and infrastructure.

The regulatory framework governing the energy sector in Tanzania operates through licensing systems, tariff regulation, technical and safety standards, compliance monitoring, inspections, dispute resolution mechanisms, and enforcement procedures. Licensing controls market entry, ensuring that only qualified entities operate in the sector. Tariff regulation ensures fairness and cost recovery. Technical standards ensure safety and quality, while compliance mechanisms ensure accountability. EWURA and PURA remain central in implementing these tools.

7. Regulatory Tools and Mechanisms

The regulatory framework governing the energy sector in Tanzania operates through licensing systems, tariff regulation, technical and safety standards, compliance monitoring, inspections, dispute resolution mechanisms, and enforcement procedures. Licensing controls market entry, ensuring that only qualified entities operate in the sector. Tariff regulation ensures fairness and cost recovery. Technical standards ensure safety and quality, while compliance mechanisms ensure accountability. EWURA and PURA remain central in implementing these tools.

8. The Role of the Private Sector in Tanzania’s Energy Sector

The participation of Independent Power Producers (IPPs) and other private sector actors has become increasingly important in Tanzania’s energy sector. They complement government efforts by addressing growing energy demand, improving efficiency, and mobilising investment capital. In addition, Public-Private Partnerships (PPPs) play a supportive role by enabling collaboration between the government and private entities in the financing, development, and operation of energy infrastructure projects, thereby enhancing service delivery and reducing the public sector’s financial burden.

IPPs generate electricity and supply it to TANESCO or eligible consumers under Power Purchase Agreements. They also invest in renewable energy and natural gas projects, contributing to increased generation capacity and improved reliability. Private sector involvement extends to petroleum infrastructure, renewable energy systems, and rural electrification projects. This participation enhances innovation, efficiency, and competition within the sector.

9. Key Features of the Legal and Regulatory Framework

9.1 Liberalisation and Private Sector Participation

The framework promotes private sector participation in electricity generation, petroleum operations, and renewable energy development, enhancing efficiency and investment mobilisation.

9.2 Consumer Protection

Regulatory authorities ensure that consumers receive reliable, affordable, and quality energy services through complaint mechanisms and service standards enforcement.

9.3 Promotion of Renewable Energy

Renewable energy sources such as solar, wind, biomass, geothermal, and mini-hydro are actively promoted, especially in rural areas.

9.4 Environmental Sustainability

Environmental protection is integrated into all energy projects through mandatory EIAs and compliance requirements.

10. Challenges in the Regulatory Framework

The energy sector faces challenges, including inadequate infrastructure, high investment costs, limited rural access, regulatory overlaps, dependence on hydropower and fossil fuels, and financing constraints. Addressing these requires reforms, investment, and stronger institutional coordination.

Conclusion

The legal and regulatory framework governing Tanzania’s energy sector is comprehensive and continues to evolve in response to national and global developments. Guided by the National Energy Policy and supported by key statutes and institutions, the framework provides a strong foundation for sustainable energy development, investment promotion, and consumer protection. Institutions such as EWURA and PURA play central roles in ensuring regulation, transparency, accountability, and efficiency. Private sector participation, particularly through IPPs, has significantly contributed to sector growth and diversification. However, achieving long-term energy security will require continued reforms, infrastructure development, and increased investment in renewable energy. With effective implementation of its legal framework, Tanzania is well-positioned to strengthen its energy sector and support long-term socio-economic transformation.