19 September 2013 – An investment plan to help Tanzania upscale the development of its renewable energy resources has been endorsed by the Climate Investment Funds (CIF). The plan is designed to shift Tanzania from increasing dependence on fossil fuels and intermittent hydro resources to a more diversified energy mix making use of the country’s abundant geothermal and solar resources.
The plan will be funded by US$50 million from the CIF’s scaling-up renewable energy program in low-income countries (SREP). The balance will come 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 US$25 million from SREP and US$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. The plan is also to 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; stakeholder 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 kWh to 350 kWh, with annual electricity output from renewable energy increasing from 370 GWh/year to 2,000 GWh/year once the geothermal plant becomes operational.
An additional US$1.7 million was also approved in project preparation grants for the two components of the plan.