CrossBoundary Energy Access (CBEA), Africa’s first dedicated fund for commercial and industrial solar power (PV), has recently announced its first transaction to finance 60 mini-grids in Tanzania.
The project is in partnership with PowerGen Renewable Energy, one of the leading mini-grid developers and operators in Africa.
CBEA’s initial USD 5.5 million investment will fund 60 mini-grids providing solar power to 34,000 people in rural homes and businesses in Tanzania.
It is the first time that a long-term project finance structure – traditionally used to fund large-scale infrastructure projects – is being used in the rural mini-grid sector in Africa.
Mini-grid developers like PowerGen have so far struggled to attract long-term financing for their projects because each mini-grid is too small to be individually financed.
To address this, CBEA established a special purpose entity in Tanzania that will purchase PowerGen’s existing and future operating mini-grids in Tanzania.
PowerGen will continue to provide long-term customer and asset management services to the mini-grid customers.
Tanzania’s sunshine hours per year range between 2,800 and 3,500 with global horizontal radiation of 4–7kWh per m2 per day.
To date, about 5.3MWp of Photovoltaic (PV) solar energy have been installed in Tanzania.
The Government supports solar development within the country by removing VAT and import taxes on the main solar components (panels, batteries, inverters, and regulators).