Soft infrastructure Energy production and distribution facilities have been at the centre of efforts to improve the quantity and quality of infrastructure for promoting socio-economic development in Tanzania. The major sources of electricity production in Tanzania are increasingly being diversified towards natural gas, which in 2015 accounted for 34 percent of electricity production, a marked departure from the previous domination of hydroelectric power. Other alternative sources at different stages of development include solar, wind, geothermal, etc. This is an encouraging trend given the increasing unpredictability of weather and the growing negative impact of climate change for hydro generation. Good progress has been made in terms of improving generation capacity from 900MW (2010) to 1,246.24MW (June 2015), which is equivalent to 44.8 percent of the target of 2,780MW by 2015. Despite missing the target, completion of the work of laying out the Mtwara-Dar es Salaam gas transmission pipeline and of constructing production plants in Dar es Salaam such as Kinyerezi, will enable the gap between supply capacity and demand to be narrowed further. The main challenges characterizing the energy sector include low access, by both urban and rural populations and high costs of power production, distribution and transmission. A period of about 40 years of Government monopoly has stifled potential competition and efficiency in electricity supply. For quite some time the subsector has been characterised by overreliance on Hydro Electric Power (HEP), underinvestment, limited diversification of energy resources and inadequate efforts to expand customer base and optimally serve clients.