IFC, a member of the World Bank Group, has provided a $60m loan to PanAfrican Energy Tanzania to help develop Tanzania’s offshore natural gas reserves.

IFC’s financing will be used to fund the development of the Songo Songo gas field, located about 15 km from the Tanzanian mainland and 200 km south of the commercial capital, Dar es Salaam.

“The Songo Songo field is Tanzania’s most important source of proven natural gas production, and is the largest supplier of energy to the Dar es Salaam region,” said Lance Crist, IFC Global Head of Natural Resources.

PanAfrican Energy Tanzania is a wholly-owned operating subsidiary of Orca Exploration Group.

“This investment enables Orca to undertake urgently needed development of the Songo Songo field and safeguards Songo Songo’s future as an important part of Tanzania’s energy security,” said W. David Lyons, chairman and chief executive officer of Orca.

According to the Tanzania Private Sector Foundation, access to reliable electricity is the top barrier to doing business in Tanzania.

Only 38% of Tanzania is electrified, with demand for electricity growing nearly 15% per year.

Developing natural gas reserves for gas-to-power projects will help the country diversify its power supply which is currently heavily reliant on hydropower facilities, which can be unreliable during droughts.

“Through this investment, IFC is working to help to alleviate electricity shortages in Tanzania, which are an impediment to the country’s continued economic growth and development,” added Crist.