Tanzania is poised to scale up the development of its abundant renewable energy resources after receiving endorsement from the Climate Investment Funds (CIFs) with the support of the African Development Bank (AfDB).
The Bank said Friday the plan 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.
Funded by US$50 million from the CIF’s Scaling-Up Renewable Energy Programme in Low-Income Countries (SREP) and the balance from the AfDB, World Bank, government, private sector, commercial sources and other development partners, the plan features a geothermal development component and a renewable energy for rural electrification component.
The geothermal development component, which is expected to receive US$25 million from SREP and US$45 million support from the AfDB, will catalyse the 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.
According to the AfDB, 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,” the Bank said.
By 2020, it is expected that per capita electricity use in Tanzania will increase from 78 to 350kWh, with annual electricity output from renewable energy increasing from 370 to 2,000 GWh/year once the geothermal plant becomes operational.
An additional US$1.7 million has also been 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 US$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 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 programmes.