VILLAGE LEVEL ENERGY: EXPERIENCE FROM REA

Arusha: 4th June 2014

Advera Mwijage Technical Assistance Officer Rural Energy Agency P.O. Box 7990 Dar-es-Salaam Email: info@rea.go.tz Website: www.rea.go.tz

APPROPRIATE TECHNOLOGIES FOR SUSTAINABLE

ENERGY IN OFF-GRID RURAL COMMUNITIES (SMART

VILLAGES INITIATIVE)

REA - Establishment

Rural Energy Act No. 8 of 2005 establishes:

Rural Energy Board (REB);

Rural Energy Fund (REF);

Rural Energy Agency (REA);

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REA - Governance Ministry of Energy Minerals

Rural Energy Board

Rural Energy Agency

Rural Energy Fund (REF)

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REA – Roles and Responsibilities

Financing for: Technical Assistance for Pre- Investment Activities;

Training and Capacity Building;

Market Development for Renewable Energy Technologies;

Implementation of Projects.

Experience Sharing and Networking;

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REA - Sources of Funds

Rural Energy Fund (REF)

Government Budgetary Allocations & Development Partners;

World Bank Support

The Off-Grid Component of the Tanzania Energy Development and Access Expansion Project (TEDAP)

Special Purpose Funds

EU Energy Facility for RE Planning

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REA - Financing Opportunities

Financing available for Rural Energy Projects:

Matching Grants

Performance Grants

Credit Line for Long Term Financing

Carbon Financing

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REA - Matching Grant

Support pre-investment activities like:

Feasibility Studies;

Socio-economic Studies and Market Analysis;

Environmental and Social Impact Assessment;

Preparation of Bankable Business Plans;

Financial Intermediation & Closures;

Training and Capacity Building;

Market Development.

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REA - Performance Grant

Support to buy down project capital costs to lower the unit cost of the energy service provided;

Size of Performance Grant depend on the type of technology under consideration: Grid extension: US$ 500 per Connection;

Solar PV: US$ 5 per Watt- Peak Installed.

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REA - Long Term Financing Credit Line to provide long term financing to rural energy projects:

Tenure: up to 15 years; and

Grace Period: 5 years.

Credit Line is Commercially and Competitively Operated:

Shortlisted Banks: CRDB, NMB, NBC, Azania Bank, United Bank of Africa and Stanbic.

Three Projects Mwenga Hydropower Company, 4MW accessed TZS 4.8 Billion through CRDB Bank; Andoya Hydroelectric Power, 1MW accessed TZS 2.7 Billion from CRDB and Ngombeni Biomass Project, 1.2 MW accessed TZS 0.96 Billion TZS from NBC

Credit Line Apply Floating On-Lending Rate:

Recalculated After Every Six Months.

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REA - Carbon Finance CDM Program of Activities (PoA) for Renewable Energy Projects in

Tanzania;

The aim of the programme is to enable the Renewable Energy Projects to access Carbon Funds.

Provides Advance payment of potential CERs (Certified Emission reductions) used to bridge the equity gap.

Implemented by REA in partnership with WB

REA is the coordinating and Managing Entity of the programme

Crediting period 2015 – 2020 with possible extension to 2022;

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Eligible Cumulative Number of Projects

Implemented by Category

11 Out of the 171 projects,96 have been completed while 75 projects are in progress

5

21

2

6

14

5

117

1

wayleave projects

Solar

Mini Hydro

Wind

Biomass

Diesel power

Grid extension

LPG

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Projects Funded by REA/REF from

2008/09 to 2013/14

12

0

5

10

15

20

25

30

35

40

45

50

2007/8 2008/9 2009/10 20010/11 2011/12 2012/13 2013/14

8.1 Bil 1 Bill

0.7Bill

86.1 Bill

8Bill

86.9 Bill

106.2 Bill

No

of P

roje

cts

Fund

ed

Financial Year Number ofProjects

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Sustainable Solar Market Packages (SSMP)

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ust

Public Facility SSMP1

Districts 1

Wards 9

Villages 82

Total Public Systems 280 (67 KWp)

Dispensaries 35

Health Centres 6

Secondary Schools 9

Staff Houses 71

Police Posts 9

Public Lighting 240

Private Market

Systems

8,000

(0.24 MWp)

SSMP 2

SSMP2 is an up-scale of SSMP1:

Negotiation stage; to be implemented in 8 Districts;

Kasulu, Kibondo, Tunduru, Namtumbo, Chato, Biharamulo, Bukombe and Sikonge;

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ust

Public Facility SSMP1 SSMP2

Districts 1 8

Wards 9 108

Villages 82 452

Total Public Systems 280 (67 KWp)

2,034 (740 KWp)

Dispensaries 35 166

Health Centres 6 20

Secondary Schools 9 97

Staff Houses 71 924

Police Posts 9 17

Public Lighting 240 2,260

Private Market

Systems

8,000

(0.24 MWp)

71,163

(1.42 MWp)

SMALL HYDROPOWER PROJECTS

MAWENGI: Capacity 300kW

Connections made: 1,143 – Completed

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•300 kW – remote mini-grid

•1,143 Connected Customers

•Mawengi village, Njombe,

Tanzania

MAWENGI hydropower project

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Mwenga 4 MW 2600 Connections to be made: So far 834 in 15 villages & sells to the grid

Lighting Rural Tanzania Completion

The technologies used are: Solar, Solar-wind Hybrid, Small Hydro & Biomass.

Beneficiaries: Public Institutions National wide

Started 2010

10 projects were selected and awarded approximately 100,000 USD each.

2012

15 projects were selected and awarded approximately 100,000 USD each.

Coming 2014

Amount to be awarded in total will be around 3 Million USD

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Benefits

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Economic benefits: Small Business

Centers i.e shops, stationeries, welding &

milling machines

Communication services-Mobile Phone

charging

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Improvement of Social services

Education: electric appliances in

rural schools has increased:

computers, photocopiers Access to

electricity in rural areas

Dispensaries & Health activities,

safety etc

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Water supply and engagement of irrigation farming schemes in rural area

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Challenges

Securing enough funds to match grant requests;

Compensation to properties affected by rural electrification

projects

Attracting private sector investments in provision of modern

energy services in the rural areas; and

Long transmission distances and irregular population densities in

rural areas;

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Way Forward

When funds are available: Things are possible

Despite of the achievements, more work has to be done

Efforts to mobilize funds for project funding will continue

Promoting and facilitating more innovation in rural

electrification projects

Facilitating project developers with technical and financial

assistance;

Creating an enabling environment to attract private sector

participation in rural energy projects;

Continuation of initiatives to connect all social facilities in

rural areas by either grid electricity or stand-alone systems; 25 6/4/2014

Thanks You For Your Kind Attention

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