Tanzania’s Rural Energy Agency (REA) has received a $870, 000 grant by the African Development Bank-hosted Sustainable Energy Fund for Africa (SEFA) to establish the Renewable Energy Investment Facility (REIF).
The REIF will finance private sector companies developing and operating energy access projects in rural Tanzania based on renewable energy technologies to promote rural electrification and improve access to electricity in the country.
The country’s national electricity coverage is estimated at just over 20 per cent with access for the rural population at only 7 per cent, leaving nearly 30 million people without electricity access.
There is significant market potential for off-grid electrification projects in Tanzania due to its vastness and low population densities which make grid extension in the country expensive.
The government of Tanzania aims to increase access to electricity by promoting renewable energy through off-grid/mini-grid electrification which it estimates could benefit 9.1 million people in the country.
It plans to achieve 1.3 million rural connections and increase overall average access rate to 35 per cent by 2022.
The SEFA grant will include advisory support; development of operational guidelines; risk mitigation framework; fund manager identification; technical and institutional support for REA towards the establishment of REIF; and capacity building for relevant public sector institutions/agencies and private sector project developers.
“It will help address existing financing gap in the market and accelerate private sector participation in off-grid electrification in Tanzania. We expect this initiative to make a real contribution to Tanzania’s ambitious energy access targets, ultimately improving livelihoods for all rural communities in the country,” Tonia Kandiero, AfDB Resident Representative in Tanzania said.