Tanzania plans to unveil a series of energy plans aimed at cushioning businesses and households from power cuts and to bail out the state-owned energy firm in the next national budget.

Minister for Energy and Minerals Sospeter Muhongo said the government, in collaboration with parliament, was developing short-term and long-term plans to be presented during the parliamentary budget session expected to start mid-next week. The plan, he said, could entail changing the Tanzania Electric Supply Company’s management structure.

“The plan will be announced later in the month while presenting our ministerial budget estimates in Parliament. It may entail changing Tanesco’s management structure,” he said.

The ministry’s plan comes as most parts of the country remain without electricity for over eight hours a day due to frequent rationing, unscheduled power cuts and voltages fluctuations, which continue to affect small businesses and increase production costs of manufacturing.

The prolonged shortfall in the rains has also dried up power dams, forcing Tanesco to rely on expensive energy sources.

The minister, however, didn’t say how much is to be allocated for the energy sector though his finance counterpart, William Mgimwa, last week said that the priorities for the forthcoming financial year’s budget would focus on ICT infrastructure and education and power improvement.

Tanesco has recently been facing financial difficulties and is unable to pay power generation companies who were owed over $250 million in December 2012; Songas alone, which supplies about 300MW of the electricity Tanesco sells to its customers, was owed $50 million.

The energy firm has been pushing for higher tariffs. However, in January, Tanesco withdrew its application to Ewura for a power tariff hike by 155 per cent.

Tanzania has the lowest electricity tariffs in East Africa, but manufacturers argue that there are no power cuts in the countries with high tariffs. They further argue that manufacturers incur more costs in Tanzania because persistent power cuts affect production, forcing them to run their factories on generators.

The company’s operating deficit currently stands at a colossal Tsh7.3 Trillion ($4.7 billion) according to the latest International Monetary Fund data.

“Tanesco’s financial difficulties need to be addressed speedily. Large arrears and continued losses pose significant risks to growth and the budget,” said IMF in a report in January.

Two weeks ago, Tanzania said it had secured a package of rescue loans to save the state energy firm.

The World Bank stepped in to provide financing to the tune of $121.46 million targeted towards supporting power sector reforms and expansion of natural gas use in Tanzania.

Late January, Tanesco kicked off the search for a new chief executive officer to replace William Mhando, who was relieved of his duty over allegations of abuse of office and misuse of public funds.

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Additional reporting by Joseph Mwamunyange.