The New Pangani Falls Power station is situated in Muheza District in Tanga region. It is 12 km off the Segera -Tanga highway at Hale Township. The plant started its commercial operation in November 1994. Before the commissioning of the plant, the country had experienced a serious power shortage since 1992. Therefore the early commissioning of the plant (three months earlier than planned) came to a great rescue of Tanzania.

The power plant utilizes the total head and flow available on the lower reaches of the Pangani River downstream of the Hale power plant where 21 MW was commissioned in 1964. The Plant has 4 times higher capacity than the Old Pangani Falls Power plant, which was closed to allow the redevelopment.

As part of the redevelopment project, water management of the Pangani basin was organized by creating the Pangani Basin Water Office. The office supervises the use of water, including registration and issuing of water rights, and stopping illegal abstractions.