Tanzania Diesel Generator Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Tanzania diesel generator market is expected to grow with a CAGR of around 3.6% during the forecast period. The COVID-19 pandemic had a significant impact on the diesel generator (DG) market of the country due to reduced power demand caused by the slowdown in major sectors like the manufacturing and construction industries. It was estimated that in 2020, the production capacity in the light products manufacturing industry of all the East African nations got reduced to 42% during the pandemic, from over 50% before the outbreak. The Tanzania DG market is likely to grow more primarily due to the deteriorated power supply scenario in the country and the growth in the industrial development of the country. However, the market growth can be impeded by the stringent regulations on various industries by the government, to reduce the carbon-emission rate by adopting a cleaner method of power generation.

Key Highlights

• The industrial segment is expected to witness the highest growth in the near future due to the numerous planned industrial projects in the country.
• The recent growth in the construction activities in the country is likely to become the most attractive opportunity for the DG market in the country. It includes both private projects such as residential and commercial real estate projects, as well as public projects such as the construction of roads, bridges, railways, water systems, etc.
• The steady growth in the service sector is expected to drive the market in the coming years.

Key Market Trends

Industrial Segment Expected to Dominate the Market

• Tanzania's industrial sector has witnessed an upsurge in recent years. The share of the industrial sector in the country's GDP was around 28.67% in the year 2020, which stands at second place in the sectoral contribution, after the service sector and agricultural sector.
• The country's Ministry of Finance and Planning has recently recommended to allocate more funds to the key projects planned for the year 2022-2023, as the year 2022-2023 is the second year of the National Five Year Development Plan(2021-2026). The projects tabled for the plan are mostly from the industrial sector.
• In August 2021, the installation works for the Julius Nyerere Hydropower Plant were started by the joint venture of the Arab Contractors and the Egypt-based company Elsewedy Electric in Tanzania. The project consists of 9x235MW turbines installation for a total capacity of 2115MW. The commissioning of the project is expected in 2022 or 2023. Installation work has come after the completion of relevant civil works carried out by Egyptian and Tanzanian engineers and technicians.
• In December 2021, the Tanzanian government entered into a contract with Turkish firm Yapi Merkezi to construct a 368 km section of standard gauge railways in Tanzania. The USD1.9 billion project will connect Dar es Salaam and Morogoro city. The electrical testing has already begun in the year 2021, and the project is expected to be operational by 2022.
• Such initiatives to expand the industrial sector will surely have an overwhelming impact on the share of the industrial domain of the diesel generators market.

Growth of the Service Sector Expected to Drive the Market

• The service sector of the country largely includes the services like IT and data centers, schools, hospitals, small and medium business startups etc. The sector's contribution to the GDP was around 36.25% in 2020, which was the largest among all the sectors.
• The government programs to give a boost to the trade and economic activity and fostering digitalization in the country is the most prominent reason for the highly awaited technical development in the service sector.
• As an example, the Ministry of Communications and Information technology, Tanzania, approved the Digital Tanzania Project in May 2021, which aims at increasing the access to high-quality broadband internet services for government, businesses, and citizens and enhance the government's capability to offer digital public services in the country. The initiative will lead to the setting up of more data centers and other IT services in the nation, which need a continuous power supply.
• Moreover, the infrastructural development of the commercial sector is expected to give a boom to the market. For instance, in November 2021, the Bagamoyo Special Economic Zone project in Tanzania became the new subject of contention for the Ministry of Industry and Trade, Tanzania. The multi-billion-dollar project was implemented by the Tanzanian government, China Merchants International, and the Oman National Government Reserve Fund (SGRF) to establish the largest port for trade and industries in East Africa. The project is expected to be in service by 2023.
• Owing to such developments, it is claimed that the steady growth in the service sector will lead to robust growth in the power demand and solutions like DG sets.

Competitive Landscape

The Tanzania diesel generator market is moderately fragmented. Some of the key players in this market include Masterpower Generator Industry and Trading Inc., African Power Machinery (TZ) Ltd, Aksa Power Generation, Caterpillar Inc, and Phoenix Diesel Power Ltd. among others.

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• The market estimate (ME) sheet in Excel format
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