Tanzania has granted the National Methanol Company a comprehensive 10-year tax holiday to develop a Sh4.2 trillion ($1.6 billion) gas-to-methanol and liquefied natural gas processing facility in Lindi Region. The incentive package, announced by Minister for Investment, Industry and Trade Ashatu Kijaji at the Tanzania-China Business Forum on June 14, includes exemptions from corporate income tax, import duties on capital goods, and value-added tax on project-related supplies.

The project, being developed in partnership with Chinese investors, aims to tap into Tanzania's vast natural gas reserves — estimated at over 57 trillion cubic feet — to produce 1.5 million tonnes of methanol and 2 million tonnes of LNG annually once fully operational. Construction is expected to begin in early 2026, with first production targeted for 2029.

NMC Managing Director Dr James Kasiga said the tax exemptions are critical for attracting investors and ensuring the project's global competitiveness. "The tax holiday will significantly reduce the project's upfront costs and make it more attractive to our investment partners," Dr Kasiga said.

The project is expected to create over 5,000 jobs during the construction phase and approximately 1,500 permanent positions once operational. The methanol and LNG output will target export markets in Asia and Europe, positioning Tanzania as a significant player in the global gas value chain.

Energy economist Dr Emmanuel Mwakasege described the project as a step toward monetising resources that have remained largely untapped. "Instead of exporting raw gas, this project will process it locally, creating jobs, generating tax revenue, and building industrial capacity," he said.

The NMC facility could also serve as a catalyst for the broader Tanzania LNG project being developed with Shell, Equinor, and ExxonMobil, which involves an estimated $30 billion investment. The Lindi Region, where both projects are planned, is poised for significant economic transformation as the government continues investing in supporting road and port infrastructure.