Financial Viability Assessment of the 2,115 MW Julius Nyerere Hydropower Project using FINPLAN

Tanzania has made significant progress in expanding electricity access and strengthening its power sector, with installed grid-connected generation capacity reaching 4,522.5 MW in 2026, of which 60.3% (2,727 MW) is hydropower. National electricity access has increased to 85.5%, connecting well over 20 million customers through the national grid. Central to this expansion is the 2,115 MW Julius Nyerere Hydropower Project (JNHPP), the largest hydropower station in East Africa, which is expected to supply approximately 51% of Tanzania's electricity generation once fully dispatched. Despite this investment, Tanzania continues to maintain one of the lowest retail electricity tariffs in East Africa while facing transmission constraints that currently limit JNHPP dispatch to approximately 40% of its installed capacity. These conditions raise important questions regarding the long-term financial sustainability of the project. This study applies the Financial Planning (FINPLAN) model to evaluate the financial viability of JNHPP over the period 2021–2075. The analysis incorporates investment costs, operation and maintenance expenses, electricity sales revenue, financing structure, inflation, exchange rates, and debt repayment assumptions. The study undertook multiple sensitivity analyses by varying electricity tariffs, plant utilization (40% and 100%), hydrological conditions (70–100% generation), and debt-to-equity financing structures. Financial performance was evaluated using Net Present Value (NPV), Internal Rate of Return (IRR), shareholder returns, and break-even analysis. The study identifies the minimum electricity tariff and utilization level required for JNHPP to remain financially viable while supporting Tanzania's affordable electricity policy. The findings provide evidence to guide tariff design, transmission investment, and long-term financing strategies, contributing to a more financially resilient and sustainable electricity sector.