Dar es Salaam. Tanzania is moving forward with a major industrial investment that will include the local assembly of heavy-duty trucks powered by compressed natural gas (CNG) under a multi-billion-dollar project in the Coast Region.
The initiative follows the signing of a land lease agreement between the Tanzania Investment and Special Economic Zones Authority (Tiseza) and HWTZ SEZ Limited for the development of a large industrial complex within the Bagamoyo Eco-Maritime City Special Economic Zone.
The land lease agreement between Tiseza and HWTZ SEZ Limited was signed on April 9, 2026, forming the legal foundation for the development of the industrial project.
Speaking to journalists in Dar es Salaam on the same day, Tiseza director general, Mr Gilead Teri, said the project would be implemented on a 500-hectare site, representing about five percent of the total Bagamoyo Special Economic Zone area.
He said the land had been leased to the investor for a period of 33 years, allowing sufficient time for phased industrial development and expansion.
The agreement carries an investment commitment estimated at $3 billion, placing it among the largest industrial undertakings recorded in Tanzania in recent years.
Industrial scale
The industrial complex will be located within the Bagamoyo Eco-Maritime City (BEMC) in Bagamoyo District, Coast Region.
The site forms part of Tanzania’s expanding network of special economic zones designed to attract large-scale manufacturing and logistics investors.
At full capacity, the Bagamoyo industrial zone is expected to host more than 150 industries across manufacturing and support services.
The development will include essential infrastructure such as internal roads, water supply systems, electricity distribution networks and renewable energy installations, including solar power systems.
Production timeline
Construction of the industrial complex will be carried out in phases, with three major factories scheduled for completion before the end of 2026.
Among the planned facilities is a compressed natural gas heavy-duty truck assembly plant, expected to produce the first locally assembled CNG-powered lorry by late 2026.
Initial production is projected to begin with about 450 trucks, with output expected to rise to more than 5,000 units annually once the facility reaches full operational capacity.
In addition to the truck assembly plant, the project will include a motorcycle and fishing boat manufacturing facility and a factory producing construction materials and metal spare parts.
These facilities are intended to reduce reliance on imported vehicles and industrial components while strengthening domestic manufacturing capacity.
The industrial complex is also expected to create over 5,000 direct jobs, while supporting technology transfer and skills development among Tanzanian workers.
Strategic use of natural gas resources
The decision to prioritise CNG-powered truck assembly aligns with Tanzania’s efforts to expand the use of domestic natural gas resources.
Tanzania holds more than 57 trillion cubic feet of natural gas reserves, positioning the country among Africa’s significant gas producers.
The shift towards gas-powered transport is expected to reduce dependence on imported diesel and lower operating costs for transporters.
Industry estimates suggest that compressed natural gas can be 40 to 50 percent cheaper than conventional liquid fuels, offering significant savings for freight operators.
Authorities have also been expanding CNG refuelling infrastructure along key transport corridors to support the anticipated rise in demand for gas-powered vehicles.
Economic, logistics significance
Heavy-duty transport plays a central role in regional trade, particularly for land-linked economies in East and Central Africa that depend on efficient freight systems.
Officials believe locally assembled CNG trucks will enhance the efficiency of freight transport while lowering long-term logistics costs.
The Bagamoyo project is also viewed as a key component of Tanzania’s broader industrialisation strategy, which prioritises manufacturing growth and export-oriented production.
Special economic zones have been identified as essential instruments for attracting foreign investment and supporting large-scale industrial activity.
Global energy security
The urgency to diversify energy sources has been heightened by ongoing geopolitical tensions in the Middle East, particularly involving Iran.
Recent hostilities in the region have disrupted maritime shipping routes used to transport crude oil and refined petroleum products, especially through the Strait of Hormuz, one of the world’s most critical global energy corridors.
Disruptions to shipping through the passage have historically affected nearly one-fifth of global oil supplies, contributing to volatility in fuel prices and concerns over supply reliability.
Such developments have intensified calls for countries reliant on imported petroleum products to strengthen domestic energy alternatives.
For Tanzania, investment in gas-powered transport systems is increasingly seen as a strategic measure to enhance energy security while supporting industrial growth.
