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Songas equally gets Cornavirus pang impact

Songas equally gets Cornavirus pang impact

SONGAS has been impacted negatively by coronavirus pandemic that forced the energy firm to reduce electricity sold to Tanzania Electric Supply Company Limited (TANESCO).

The firm estimated that the power sale to the state utility firm went down by almost 20 per cent because most of the businesses, mainly hotels shut down.

Songas Managing Director Anael Samuel said they reduced the amount of power supplied after Tanesco demand fell following the closure of a a number of tourism hotels.

“As a result, Tanesco reduced electricity requirements from us which impacted our generation and cash flow,” Mr Samuel told ‘Daily News’.

The Covid-19 contributed to measures such as lockdown where many countries that do business with Tanzania halted their operations. As a result, Songas Chief said, companies, factories, hotels who were the big consumers of electricity closed down or temporarily ceased operations.

“Such constraints directly impacted Tanesco hence, the electricity demand reduced by 20 per cent” Songas said they managed to sell about 1223 Gigawatt hours (GWh) last year compared to 1514GWh in 2019. This year, however, they are optimistic because of the reopening of borders, and the slow return of businesses.

“We expect to meet our targets and deliver value to our shareholders, including the government of Tanzania,” he said.

According to Bank of Tanzania’s Consolidated Zonal Economic Performance Report for quarter ended March, a total of 2066.8 GWh was generated compared with 2000.2 GWh generated during the similar quarter last year. Similarly, production of natural gas rose to 15,897.5 million standard cubic feet (Mscf) from 14,048.6 Mscf in the similar quarter last year.

“[The gas increase was] mainly on account of increased demand by Tanesco for generation of gas fired electricity,” BoT report said.

 Songas further said that despite the pandemic they managed to consistently pay dividends totalling 300bn/-to its shareholders since 2012 with 154bn/-being paid to the government through TPDC and Tanesco.

Also last year, Songas paid a dividend of some 10 million US dollars compared to 15 million US dollars in 2019. Of which, the government received about 4 million US dollars (about 10bn/-).

Songas is owned by Globeleq by 54.1 per cent), TPDC by 28.69 per cent, Tanesco 9.56 per cent, and Tanzania Development Finance Company Limited (TDFL) by 7.65 per cent.

Thus the government owns Songas by almost 40 per cent through Tanesco and TPDC. The other shareholders in Globeleq whose ownership includes the Norwegian Norfund and UK’s CDC Fund at 30 per cent and 70 per cent respectively.

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Author: DAILYNEWS REPORTER

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