DODOMA, Oct 13 – Tanzania expects to finalise agreements for major investment projects in the coming months, including a $42 billion liquefied natural gas (LNG) development that the government sees as a cornerstone of its industrialisation strategy.
Finance Minister Khamis Mussa Omar told Reuters that negotiations on the LNG project, led by Norway’s Equinor and Shell, were nearing completion after an earlier target to sign the agreement before June was missed.
The project is expected to unlock an estimated 47.13 trillion cubic feet of natural gas reserves, positioning Tanzania to expand its role in international energy markets while supplying part of its production to domestic consumers. “It’s almost there,” Omar said.
Other participants include ExxonMobil, Pavilion Energy, Medco Energi and state-owned Tanzania Petroleum Development Corporation. Equinor and Shell did not respond to requests for comment.
The development forms part of a broader effort to establish East Africa as a significant energy-producing and export region. The plans also coincide with Uganda’s preparations for its first oil exports through Tanzania’s port of Tanga, targeted for early 2027.
Although most of the LNG output is expected to be exported, a portion will be reserved for Tanzania’s domestic market, potentially supporting industrial activity and expanding the use of natural gas in the country’s energy system.
Critical Minerals and Power Generation
Tanzania is also advancing negotiations on two critical minerals projects, with Omar saying agreements were close but declining to disclose further details.
He noted that US investors were showing particular interest in opportunities across energy and critical minerals, as the government seeks international capital for projects capable of generating revenue and supporting their own financing requirements.
Alongside resource development, Tanzania plans to increase electricity generation capacity to 8,000 megawatts by 2030, roughly double its existing level.
The government also aims for energy sources it classifies as clean, including hydropower, solar, wind and natural gas, to account for approximately 75% of the energy mix.
The expansion of electricity infrastructure is central to the country’s ambition to attract industrial investment, improve energy availability and capture more economic value from its natural resources.
Tanzania Broadens Access to Domestic Debt Markets
The government is also working to attract more foreign investment into its domestic debt market as it seeks to diversify financing sources.
Tanzania widened foreign investor access to domestic bonds in July, introduced a sovereign yield curve in August and enacted reforms intended to encourage corporate debt issuance.
However, authorities are still assessing the risks associated with greater foreign participation. Omar said the central bank was studying the experiences of other African economies before the government makes further decisions.
The government has not yet decided whether to issue an international bond.
The strategy reflects a broader trend among frontier economies seeking to attract international investors to local-currency debt markets, potentially expanding access to capital while managing exposure to foreign-currency borrowing.
Tanzania currently finances around two-thirds of its 62.3 trillion Tanzanian shilling ($23.7 billion) budget through domestic revenue, according to Omar.
Official development assistance, which previously accounted for approximately 40% of the budget, has declined as external support has fallen globally. Omar described its current contribution as “very, very negligible.”
IMF Engagement Remains Under Review
Tanzania is also considering whether to pursue a new lending programme with the International Monetary Fund, with a decision expected by June, Omar said.
The country’s previous $1.7 billion IMF programme, which included an Extended Credit Facility and a climate-focused Resilience and Sustainability Facility, concluded in July.
The government’s next decision on IMF engagement will form part of its broader assessment of financing options as it seeks to sustain investment, strengthen domestic revenue mobilisation and advance major infrastructure and natural-resource projects.
Taken together, the LNG negotiations, critical minerals investments and domestic debt-market reforms reflect Tanzania’s effort to mobilise more capital for long-term economic development while reducing reliance on external assistance.
