President Samia Suluhu Hassan inaugurated the plant on August 22, noting that the additional generation had helped eliminate a power shortage that previously resulted in frequent blackouts and constrained economic activity. “We are confident that this project will increase opportunities for business, investment, and production, create jobs, and boost individual income and the national GDP as a whole,” she said.

The facility, built on the Rufiji River, cost about TZS7.45 trillion ($2.82bn) and is Tanzania's largest power station. Construction began in 2019 under an engineering, procurement and construction contract awarded to a joint venture between Egypt's state-owned Arab Contractors and Elsewedy Electric (EGX: SWDY). Tanzania Electric Supply Company (Tanesco) is responsible for the project.

The plant consists of nine generating units of 235 MW each and was designed to produce about 6,307 GWh of electricity annually. The first unit was connected to the grid in February 2024, with the remaining units brought online progressively. All nine units had been commissioned and synchronised with the national grid by March 2025.

The plant's phased commissioning helped lift Tanzania's total installed generation capacity to 4,646 MW, compared with peak demand of about 2,271 MW, leaving a theoretical surplus of around 2,375 MW, Energy Minister Deogratius Ndejembi said.

“Adding generation capacity alone is not enough,” Ndejembi said at the inauguration, adding that Tanzania also needed a network capable of carrying the additional electricity across the country. Meanwhile, Tanzania already has an agreement to sell power to Zambia and an arrangement with Kenya allowing electricity trading according to demand, while talks are continuing with other neighbouring countries.

Electricity exports

Kenya is the most immediately accessible export market. The 400 kV Kenya-Tanzania interconnector was energised in December 2024, connecting the two national grids through a roughly 510 km transmission corridor. Tanzania's energy regulator has approved an initial 4 MW power exchange arrangement allowing Kenya to buy Tanzanian electricity during periods of peak demand, although the amount remains small compared with Tanzania's 2,375 MW theoretical surplus.

The line also connects Tanzania to the wider Eastern Africa Power Pool (EAPP) through Kenya and Ethiopia. It forms part of a regional transmission system intended to allow electricity to move between markets according to supply, demand and prices rather than leaving individual countries dependent entirely on domestic generation.

Zambia is potentially the more important medium-term market, particularly because it provides a gateway into the Southern African Power Pool (SAPP). Tanzania says it has already reached an agreement to sell electricity to Zambia, although the direct Tanzania-Zambia interconnector is not yet complete.

Once completed, the connection is intended to help link the EAPP with the SAPP. That could eventually give Tanzanian generators access through Zambia to buyers across southern Africa rather than limiting exports to immediate neighbours.

Uganda represents another future trading route rather than an obvious large net market for Tanzanian electricity. The World Bank, which approved financing for the Uganda-Tanzania interconnector in June, describes Uganda itself as having surplus clean energy resources that could be sold into regional markets.

Growth via green power

The project has substantially changed Tanzania's electricity mix. Hydropower now accounts for around 60% of electricity generation, with natural gas providing much of the remainder. The Julius Nyerere plant alone supplied about 44.9% of electricity fed into the national grid in the year to May 31, according to the Energy Ministry.

The economic effect is already appearing in official data. Tanzania's 2024 Economic Survey said real GDP growth accelerated to 5.5% from 5.1% in 2023, listing the start of generation at Julius Nyerere among the factors supporting growth. The Bank of Tanzania subsequently said electricity output increased 19% in the first quarter of 2025, primarily because of the project's completion.

Government data point to the effect continuing into 2025. Real GDP expanded 6% year on year in January-September 2025, with increased electricity generation, particularly from Julius Nyerere, listed among the main drivers. Electricity generation itself grew 15.5% during the period, one of the fastest rates among major sectors of the economy.

The World Bank has also linked Tanzania's stronger industrial performance to the step change in electricity supply. Its February 2026 Tanzania Economic Update said the additional generation was already being absorbed by mines, cement producers, agro-processing operations and the expanding national grid. “Industrial activity is picking up, aided by a major expansion in electricity supply,” the World Bank said. It expects Tanzania's growth to remain around 6% as infrastructure improvements combine with macroeconomic stability and a stronger business environment.

Credit rating agencies likewise view infrastructure investment as an important component of Tanzania's growth story, although none has published an estimate assigning a specific contribution by Julius Nyerere alone to GDP growth.

Fitch Ratings revised Tanzania's sovereign outlook to Positive from Stable on August 21 while affirming the rating at B+. It expects real GDP growth of 5.8% in 2026, compared with a projected 3.7% median for B rated sovereigns, followed by average growth of 6.1% in 2027-2028. Fitch expects public investment, tourism, Tanzania's development as a regional logistics hub and mining expansion to support growth.

Fitch had explicitly linked Julius Nyerere with Tanzania's growth outlook in an earlier sovereign assessment, saying expansion would be driven by agriculture, mining and tourism “as well as infrastructure investment”, including Julius Nyerere and the Standard Gauge Railway.

Moody's Ratings, which affirmed Tanzania at B1 with a Stable outlook in February 2026, expects growth of at least 6% over the medium term, supported by investment in manufacturing, mining and mineral processing as well as tourism and transport. Moody's has not published a separate estimate of Julius Nyerere's contribution to GDP.

As Energy Minister Deogratius Ndejembi noted at the dam’s inauguration, the main constraint is now moving from generation to transmission and demand. Tanzania must expand domestic industrial electricity consumption and cross-border transmission capacity if it is to convert its theoretical 2,375 MW surplus into additional industrial production and power export revenue.

The project has faced opposition from conservation groups because the dam is on the Rufiji River within the Selous Game Reserve and will impact wildlife and downstream habitats.