ZANZIBAR'S MAIN ISLAND: POWER CRISIS UNABATED

UNCLAS SECTION 01 OF 03 DAR ES SALAAM 000038 SIPDIS DEPARTMENT FOR AF/E JTREADWELL; INR/RAA: FEHRENRIECH STATE PASS TO USAID, USTDA E.O. 12958: N/A TAGS: ENRG ECON ETRD MCC PGOV EPET EIND TZ SUBJECT: ZANZIBAR'S MAIN ISLAND: POWER CRISIS UNABATED REFS: (A) 09 Dar es Salaam 871 (B) 08 Dar es Salaam 839 and previous DAR ES SAL 00000038 001.2 OF 003 ¶1. This is an action message. Please see para. 15. ¶2. SUMMARY: On January 15, representatives from the donor community met at UNDP headquarters to hear the UN and the Norwegian Embassy's assessments of Zanzibar's needs following the December 10 malfunction of the power cable terminus connecting the main Zanzibar island of Unguja with Tanzania's national power grid. All of Unguja's power stemmed from the now-defunct cable. Absent power since December 10, water and sanitation needs are now becoming dire. While efforts are being taken to repair the cable for the second time in 18-months, indications are that it is at or near the end of its functional life. A new 100 MW power cable, funded by the U.S. Millennium Challenge Corporation (MCC),is in the process of being procured but will not be fully operational until late 2012. According to the UN's report, Zanzibar needs USD 1.4 million now to prevent a serious humanitarian crisis. However, that money would only cover costs until the end of February. The UN assessment team, supported by the donor community, recommends the immediate purchase of emergency generators to supply 26 MW of power at an estimated cost USD 11.7 million. Including fuel and maintenance, it will cost an additional estimated USD 63.4 million to operate these new generators until the MCC funded cable is operational. The preferred donor and Government of Zanzibar short to medium term solution is to immediately purchase 26 MW of emergency generators. However, if delivery is expedited there is an additional freight charge of approximately $5 million. Possible USG assistance is described below, with a caveat that these proposals have NOT been coordinated with other potential donors. END SUMMARY. ¶3. STILL NO POWER IN ZANZIBAR AND CAN'T FIX THE CABLE All - power to the main island of Zanzibar (Unguja),with a population of about 800,000, has been off-line since December 10 when the transformer for the 40MW cable that supplies 100 percent of power to Unguja's grid crashed for the second time in one-and-a-half years. Workers have been trying to fix the transformer and the pump that moves the cooling oil through the cable line (at an estimated cost of USD 3.5 million). For more than a month now, the only power has been from small scale individual generators. ¶4. From January 6-12, a UN team was on the ground in Zanzibar to make a public health impact assessment and provide recommendations. At the same time, the Norwegian Embassy funded consultants to conduct a cost-benefit analysis of available power options until the 100 MW new power cable sponsored by the U.S.'s MCC comes online in late 2012. On January 15, donors met at the UNDP headquarters to hear the results of both studies, as well as to hear commentary from senior representatives from the Zanzibar and Mainland governments. ¶5. UN ASSESSMENT: LOOMING HUMANTITARIAN DISASTER - According to the UN's report, Zanzibar needs USD 1.4 million now to prevent a serious humanitarian crisis. That money would only tide the island over until the end of February if another longer-term solution was not found. Korno Soro, the UN Resident Representative in Zanzibar, said that the Zanzibar Government (SMZ) and UNDP, with limited donor help, have been able to just barely stabilize the situation, but resources were now exhausted. With the support of Danish aid ("DANIDA"),key medical and health facilities were operational as well as limited, intermittent water to most of the population, although services have been drastically cut back. ¶6. Water production before the crisis supplied about 71-76 liters per person per day. Now it was at about half capacity (31-33 liters/day). For those without water, the street cost for a 12-liter plastic bucket of water delivered to the house was about USD 50 cents to a dollar (just below the average daily income of Zanzibar). The quality and safety of that water was suspect. ¶7. Soro said that hardest hit Urban West District, which includes Zanzibar's capital Stonetown, had a population density of 1,700 people per km2, as high a rate as existed anywhere. Sanitation is also a critical concern, and the threat of epidemical disease was particularly high there. Most schools, island-wide, remained without DAR ES SAL 00000038 002.2 OF 003 adequate water or sanitation, and nine schools close to cholera-affected areas have been closed temporarily. No specific new cholera outbreaks have occurred since the power outage, but the threat remained, he said. ¶8. Additionally, Soro said that, due to lack of electricity, the island's only water quality lab was out of commission and the chlorination unit was not running. Because of the onset of the rainy season, drains were clogged up with no means to pump them, impeding sanitation. Sanitation and maintenance of high-use public areas, mainly done at night, was not being conducted. Immunization schedules for newborns were being affected due to the lack of refrigeration, which would likely have serious reverberations months down the line. ¶9. It was costing the SMZ about USD 5,000/day to run 46 generators to provide emergency power to critical infrastructure. He said there was an urgent and crucial need of additional generators to reactivate clean and safe water pumping points. Without immediate financial support to ensure the running costs (fuel and maintenance),more services were likely to be paralyzed. The SMZ and UN have set up Acute Diarrhoea Centers (with the SMZ paying 80 percent of the cost),but they needed more supplies. Finally, Soro said that in order to enhance the preparedness and anticipate an eventual outbreak of cholera, there was urgent need to procure necessary cholera outbreak management medical supplies. ¶10. In all, the UN said USD 1,382,255 was needed to face all eventualities and cater for the day-to-day needs for the coming 6-8 weeks. This money would only cover public institutions and minimal provision of water and sanitation. Consumer electricity still would be unavailable from the Zanzibar distribution network. ¶11. SOCIO-ECONOMIC FALL-OUT: A Norwegian Aid Officer briefed that half of Zanzibar's rice crop will likely be lost because of lack of irrigation. The SMZ estimates it lost USD 7 million in tax revenues for December, and 30 percent of its budget per month was going toward the cost of the crisis. At a cost of about USD 5-6,000/day for a hotel to run a generator, many small and medium hotels have closed for the season (tourism is the number one source of revenue for Zanzibar). Additionally, services like hairdressers and repair shops also have closed due to lack of power and water. Fishing, another island mainstay, has been hammered due to lack of refrigeration. Steiner Grongstatdt of NORPLAN estimated the "socio-economic" loss at USD 10 million/month. ¶12. MID-TERM SOLUTION: USD 11.7 MILLION FOR GENERATORS: Of the various mid-term power options discussed by the NORAD assessment team, there was an emerging consensus that the best quick-fix solution would be the purchase of diesel generators capable of supplying about 26 MW. The cost of the generators was estimated at approximately USD 11.7 million, but the operational costs over three years was estimated to be USD 68.34 million. ¶13. NEXT STEPS: While exact dollar amount have not been pledged, the Nordics, British Aid (DFID),Japan (JICA) and the Agha Khan Foundation are likely candidates to fund the short-term measures described above. The Tanzania national government also is expected to announce an aid package. ¶14. The Norwegian Embassy has taken the lead in working with the Zanzibari Electricity Company (ZECO) to facilitate a medium term solution. Their preferred approach is to accept the USD 11.7 proposal for 26 MW generators. However, additional donor support beyond the Norwegians will likely be needed to cover these costs. The Swedes (SIDA) and Japanese (JICA) are possible candidates for contributing additional funds. How the not-insubstantial operating costs would be provided for is another matter. In the two-and-fro around the briefing table, it emerged that Zanzibar and Tanzania Union Government budget officials were thinking that their respective governments might proffer to "shoulder" the costs, only to bill it back to those (mostly European countries) involved in budget support assistance. ¶15. POSSIBLE AREAS FOR ASSISTANCE - Additional assistance requirements: LIFT FOR THE GENERATORS: The UN's USD 1,382,255 Zanzibar needs-estimate would only carry Zanzibar over in its DAR ES SAL 00000038 003.2 OF 003 current minimum standard status until the end of February. There is an emerging consensus by donors to take the USD 11.7 million generator purchase option as a mid-term solution. The vendor estimates a five-to-six-week sea freight delivery time to move the supplies from Belgium to Zanzibar, at a cost of USD 200 thousand. If, however, the 600-700 tons of equipment were to be moved via air, the delivery should take two-to-three weeks, but cost USD 5 million. ¶16. SHORT-TERM PROVISION OF WATER PURIFICATION AND/OR DESALINATION EQUIPMENT: Lack of potable water is a growing serious health risk on Unguja. Equipment to purify contaminated water or to desalinate sea water could ameliorate the problem. ¶17. PROVISION OF MEDICAL SUPPLIES: There is a great and growing need for cholera preparedness and diarrheal disease treatment supplies. LENHARDT