The Stiegler’s Gorge hydropower project will have direct and indirect impacts on the environment and economic activity that risk 200,000 people’s livelihoods. Its economic viability has been questioned, particularly related to its size and the increasingly variable rainfall in the region driven by climate change. Hydropower projects are characterized by significant capex, as well as long term construction and payback periods, which increases the exposure of investor capital to long term risks such as stranded assets through changes in policy, climate and technological disruption.

The natural characteristics of the site on which this project is proposed will make it near impossible to satisfy best practice environmental due diligence standards on Hydroelectric from the International Finance Corporation, particularly in relation to mitigating impacts on indigenous persons, water, protected areas and endangered species. This leaves investors possibly exposed to grievance procedures brought by civil society through, for instance, the OECD Guidelines on Multinational Enterprises.

Tanzania is blessed with a range of renewable energy possibilities from wind and solar to geothermal and sustainable hydropower. There is great potential to develop a range of sustainable renewable power sources that will diversify the energy mix and increase Tanzania’s energy security. This would help Tanzania create a modern flexible, decentralised power production and power grid.

The cost of power generation from wind and solar energy sources has been falling in the past decade. Wind energy and solar PV are now cost competitive with conventional energy sources for new investment.