A key challenge facing developers of small hydro projects in Tanzania is the lack of access to finance. To help counter this, GVEP is implementing a Pre-Investment Technical Support programme in collaboration with the World Bank and Tanzania’s Rural Energy Agency (REA).
The aim of this programme is to build the capacity of project developers by assisting them to complete feasibility studies, business plans and Environmental and Social Impact Assessments (ESIAs), all of which can be costly and time-consuming. GVEP’s support will enable the developers to access subsidies available through the Tanzania REA and secure loans from local banks.
GVEP International is collaborating with Rural Energy Agency (REA) in supporting six mini-hydropower (MHP) project developers. The six projects have a combined capacity of approximately 7.5 MW, and are located across Tanzania in the regions of Mbeya, Iringa, Ruvuma, Arusha and Kigoma. Most are isolated mini-grids not connected to the main electricity network.
James Wakaba, GVEP’s Regional Manager for Africa states, “The traditional barriers to renewable energy project development include difficulties in early stage project development due to high costs and lack of capacity to carry out feasibility studies. Projects also need to complete environmental impact assessments and have proper financial structuring. GVEP is proud to work with REA in this World Bank sponsored programme which is assisting the selected Tanzanian companies to realise energy generation from renewable mini-hydro resources. This will help more Tanzanians access energy and create economic opportunities and provide social benefits. One project will supply clean energy to the grid, providing an alternative to fossil fuel-based electricity. In addition, projects will help reduce global warming, earn carbon credits and create sustainable energy businesses with project development capability.”
This programme is supported by the Energy SME Trust Fund, financed by the Russian Federation and administered by the World Bank. The fund was established in April 2009 to support energy SME development in sub-Saharan Africa.