The International Finance Corporation (IFC), a member of the World Bank Group that finances and advice private sector ventures in developing countries, has recently launched a USD 5 million program which seeks to develop a market for mini-grid power projects and increase access to electricity in Tanzania’s rural communities.
IFC will closely work with Tanzanian project developers to teach them how to create commercially viable mini-grid business models while advising local commercial banks on how to long-term finance such projects.
The program’s final goal is to help Tanzania to diversify its energy production from oil and gas sources that generate 2,649,320,551 KWh or 43% of the total power generated in a year according to Tanzania Electric Supply Company (TANESCO) statistics.
This amount of power currently represents USD 4.65 billion on imports of refined petroleum and petroleum gas which account for 35.9% of Tanzania’s total imports according to the Massachusetts Institute of Technology (MIT).
Tanzania’s Rural Energy Agency Director General Lutengano Mwakahesya, explained that there was an urgent need to diversify the country’s power generation from fossil sources and increase energy access in rural zones of the country by the usage of mini-grids.
This program is result of the pilot programs that have been undertaken in Tanzania as the Photovoltaic-Diesel hybrid grid constructed in Lake Victoria by Rex Investment Limited and financed by the US Trade and Development Agency (USTDA) at a total cost of USD 818,000.
Tanzania plans to increase its generation capacity from the current installed 1,308 MW to 2,780 MW towards the year 2018 by using these mini-grids according to the US Agency for International Development (USAID).