EAST AFRICA POWER

CONVENTION 2012

ENERGY SUPPLY AND

HORTICULTURE IN

TANZANIA

Jacqueline MkindiExecutive DirectorTAHAEmail:taha@habari.co.tzwww.tanzaniahorticulture.com

Horticulture in Tanzania

• Horticulture is among the fastest growing agricultural

subsector,

• Very significant contribution on food, nutrition income,

and employment security

• Revenue about USD 358 million per year

• Has huge potential for growth and for economic and

social transformation

Source: TAHA & National Horticulture Development Strategy - HODECT

• Green Beans• Baby Corn, • Broccoli• Baby Carrots• Snow Peas• Green Peas• Peppers• Amaranth• Pumpkin

• Chili Peppers• Asparagus• Snap Peas• Tomatoes• Onions• Cabbages• Nightshade• Okra• Cassava Leaves

• Apples• Berries• Jack Fruit• Mangoes• Oranges• Papaya

• Passion Fruit• Pears• Pineapple• Pawpaw• Plums

• Roses• Chrysanthemum• Cuttings• Other ornamentals

• Cardamom• Cinnamon• Clove• Nutmeg• Vanilla• Herbal Medicines• Macademia Nuts

Vegetables Fruits Cuts Flowers &

OrnamentalSpices, Herbs & Nuts

Horticulture in Tanzania

Horticulture Market Characteristics and Opportunities:

� Fast growing Sector- 13% growth rate/annum

� High-Value Products

� Potential Product Industrialization

� Intensive Labor

� Perishable

Source: TAHA & National Horticulture Development Strategy - HODECT

Challenges for horticulture:

�Harvest and post-harvest losses

�Logistics for export markets

�Predominantly subsistence farms

� Inputs availability and costs

�Seasonality implications

Horticultural Value Chains and Segments

ValueChains

Value Chain Revenue

SubsistenceFarmer

60% of customer base< 2 acres

SmallholderFarmer

$2000 margin per acre/year30% of customer base

<5 acres

Medium Farmer>$2000 margin per acre/year

10% of Customer Base<50 acres

Large Farmer>$2000 margin per acre/year

<1% of Customer Base>50 acres

Flowers High

Cuttings High

Seeds Medium Medium High

Fruits Low/None Medium High High

Vegetables Low/None High High High

Medium Revenue Value Chain

High Revenue Value Chain

Value Chain not applicable to Segment

Value Chain applicable but low or no income

• An apex private sector member based organization representing actors along the horticultural value chain.

• Established in 2004 as a voicing platform for issues concerning the industry safeguarding the interests of the privates sector

• Engine behind horticulture transformation and reformation in the country.

WHAT IS TAHAWHAT IS TAHA

TAHA STRATEGIC ACTIVITIES

1) Creating business enabling environment

2) Technical Support services

3) Marketing and Information

Seedbed Tables and Covers

Technical services on GAPs

Flood Irrigation

Plant Row Spacing Plant Bed Spacing

Logistics Services as part of Technical support

Our company TAHA Fresh handling Limited established in 2008 provides affordable and reliable logistics services to the industry including:

•clearing and forwarding• airfreight bookings and negotiations,• cargo handling and trucking, etc.

THE IMPACT OF ENERGY ON THE INDUSTRY

• The impact of power or energy varies according to the following key factors

– The nature and size of business

– The type of technology employed

� horticulture is therefore a high tech

and perishable industry

� Very high power reliant and consumption

� Highly affected by unreliable power supply

and costs

TECHNOLOGY

Reservoirs and Pumps Drip Irrigation

Greenhouses Packaging and Storage

Energy: Options and costs Energy: Options and costs

Electricity supply is erratic …. with severe and prolonged power rationing.

Horticultural farmers are forced to utilize generators …. Expensive

Energy: Case of a flower farmEnergy: Case of a flower farm--Mount Meru Mount Meru FlowersFlowers-- 35ha. Rose farm in Arusha35ha. Rose farm in Arusha

Energy from generators: flower farmEnergy from generators: flower farm

Total Yearly energy consumption and total cost

Energy: Case of a vegetable farmEnergy: Case of a vegetable farmHomeveg(T) LtdHomeveg(T) Ltd

In vegetable production, energy is mainly used for operation of cooling facilities;

About 1878kWh per month, required for medium-sized company, with a cost estimated at US $ 258/month

During critical power shortage, - 18hours without electricity

• Diesel- 4-6Lts/hour

• US $ 2,940-4,390/month

• 35,280- 52,680/year

Generally…..

� A study conducted by TAHA in 2011 on the impact of the power rationing in horticultural industry revealed the following:

� Number of rationing ours in a week: 30-80hours

� Amount of diesel consumed/month: 1000-7700lts

� Cost of Diesel in a month: USD 1170-9,677

� Other related cost/month: USD 195- 800- maintenance, service, etc

OTHER POWER OPTIONS/ALTERNATIVE

1. BIOMASS

� Bio-degradable waste- quantity and reliability

2. Solar Energy

� Could be a reliable source given the climate

� For a 30-ha flower farm, total costs for installing solar energy is estimated at US $ 150,000- 200,000

� ROI can be realized in 2 years

� Preliminary study finding show solar is a cheaper source of energy – viable option

� Working with experts from Austria/Europe to study the efficient and costs.

3. Gas Alternative

� May require huge investment

� We have national gas reserve but we don’t know what happening??

Conclusions

Tanzania needs a very clear strategy and vision on how to revamp the power industry.

The timing is now as this is a critical component in

Industries and economic transformation.

The light isn’t going to get any greener!