The Small Power Producers (SPP) framework created an enabling environment for private project developments of projects up to 10MW in 2008, through standardised power purchase agreements.
An SPP is defined as a generating facility of < 10MW producing power from renewable or fossil sources, cogeneration or a hybrid system. SPPs can sell power to Tanzania's main grid or to isolated mini-grids, and wholesale (ie, to a distrubutor) or retail (ie, directly to consumers). The SPPs are categorized as 'must take facilities', therefore the offtakers are not allowed to refuse power from
The second generation rules, applicable from 1 April 2015, develop the framework as follows:
- SPPs will receive fixed tariff calculated every year;
- There will be technology-specific feed-in tariffs (FiTs) for small hydro and biomass projects, and competitive bidding to establish tariffs for solar and wind projects;
- Payments will be in US dollars or another hard currency, rather than Tanzanian shillings;
- Tariffs are not differentiated between main grid and mini grid projects.