Tanzania’s Energy Transformation

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Jakaya Kikwete, president of Tanzania

Climate Investment Funds endorses Tanzania’s plan to transform its national energy sector

THE Republic of Tanzania has received an endorsement from the Climate Investment Funds, CIF, of an investment plan which will help the country to scale-up the development of its abundant renewable energy resources. The plan, whose endorsement came on September 12, in Tunis, Tunisia, is designed to transform the country’s energy sector, shifting from its increasing dependence on fossil fuels and climate-sensitive hydro resources to a more diversified energy mix making use of the country’s abundant, reliable and cost efficient geothermal and solar resources.

The project will be funded by $50 million from the CIF’s Scaling-up renewable energy programme in low-income countries, SREP, and the balance from the African Development Bank, AfDB, World Bank, government, private sector, commercial sources and other development partners. It features a geothermal development component and a renewable energy for rural electrification component.

The geothermal development component, which is expected to receive $25 million from SREP and $45 million support from the AfDB, will catalyse development of more than 100 MW of geothermal power, principally by the private sector, and will establish an enabling environment for large-scale geothermal development.

The renewable energy for rural electrification component will seek to build an efficient and responsive development infrastructure for renewable energy-based rural electrification and demonstrate its effectiveness by supporting a time-slice of private-sector investments in off-grid electricity enterprises.

The plan will be implemented through an integrated approach that includes investments in renewable energy technologies, particularly the infrastructure needed for electricity production and distribution, stakeholders capacity building; integration with dynamic Public-Private Partnerships, PPPs, and provision of adequate technical assistance and advisory services.

It is expected that SREP Tanzania will have a transformative impact on the country by supporting low carbon development pathways through reducing energy poverty and increasing energy security. By 2020, it is expected that per capita electricity use will increase from 78 to 350kWh, with an annual electricity output from renewable energy increasing from 370 to 2,000 GWh/year once the geothermal plant becomes operational. A press release from the African Press Organisation, APO, said that an additional $1.7 million was also approved in project preparation grants for the two components of the plan.

Established in 2008 as one of the largest fast-tracked climate financing instruments in the world, the $7.6 billion CIF provides developing countries with grants, concessional loans, risk mitigation instruments, and equity that leverage significant financing from the private sector, multilateral development banks, MDBs, and other sources. Five MDBs-the African Development Bank, AfDB, Asian Development Bank,ADB, European Bank for Reconstruction and Development, EBRD, Inter-American Development Bank, IDB, and World Bank Group, WBG, implement CIF-funded projects and programs.

 — Sep. 23, 2013 @ 01:00 GMT

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