The French Development Agency (AFD) approved a USD12m credit line to the Bank of Africa – Tanzania (BOA-T) to finance renewable energy and energy efficiency projects in the country.
The credit facility agreement was signed by Bruno Deprince, AFD East Africa Community Regional Director and Ammishaddai Owusu-Amoah, Managing Director and CEO of BOA-T, on November 22nd, 2016.
The credit line will enable BOA-T to provide both short-term and long-term funding at attractive interest rates to both public and private sector clients to implement renewable energy and energy efficiency projects.
“The project will contribute to increasing energy efficiency and the share of renewable energy in the Tanzania economy, consequently contributing to reduction of CO2 emissions and the pressure placed on fossil fuels,” BOA-T and AFD joint press release indicates.
“The facility will thus help in facilitating Tanzanian entities and businesses to access affordable green technologies and to invest in rationalization of energy use, thus helping them to improve their efficiency and overall competitiveness as well develop clean energy.”
The credit line is also accompanied with a technical assistance program funded by the European Union (EU) to enable BOA-T to strengthen its capacities in green finance.
The technical assistance will also provide expertise for potential investors and project developers to further build on their expertise in developing viable renewable energy and energy efficiency investments.
This support covers the entire investment process and includes projects preparation, risk assessment, and bank capacity building.
The signed agreement falls under the Sustainable Use of Natural Resources and Energy Finance (SUNREF) East Africa program.
SUNREF East Africa
Launched in 2011, SUNREF East Africa is promoting the development of a low carbon economy in the region (Tanzania, Uganda, Kenya) by financing the development of renewable energy and energy efficiency solutions.
To support private investment in green energy and energy efficiency, AFD supports local banks in identifying green investment opportunities and in allocating green loans with favorable conditions for tailor-made debt.