IFC Launches Mini-Grid Program to Increase Energy Access in Tanzania

Dar es Salaam, Tanzania, Capital Markets in Africa — International Finance Corporation (IFC), a member of the World Bank Group, this week launched a $5 million program to increase access to energy in Tanzania by developing a market for mini-grids. The initiative aims to bring affordable, off-grid renewable energy to households and businesses in rural Tanzania.

IFC will work with project developers in Tanzania to promote commercially viable mini-grid business models, and will advise banks and financial institutions on how to extend long term finance to mini-grid developers. 

Tanzania has been selected as one of the first countries to test the concept of using small-scale renewable energy production sources under a new program, called the Scaling-up Renewable Energy in Low Income Countries Program. In Tanzania, it aims to help diversify energy production away from fossil fuel based sources. 

Mini-grids are technically and commercially viable for high-density populations that live outside the reach of the national electricity grid. The Tanzanian government estimates that about half of the country’s rural population could be served by off-grid options in a cost-effective manner. Mini-grids could provide access to electricity for 9.1 million people in Tanzania.   

Lutengano Mwakahesya, Director General of Tanzania’s Rural Energy Agency said, “We have an urgent task ahead of us to increase energy access in Tanzania. Mini-grids are a key part of the solution, so this program with IFC is an essential step to improve the quality of life of households, demonstrating the role of the private sector.”   

Tanzania’s Ministry of Energy and Minerals was closely involved in developing the mini grids program, and was represented at the event by the Assistant Commissioner, Mr. Edward Ishengoma. 

Dan Kasirye, IFC’s Resident Representative for Tanzania, said “IFC aims to help develop a robust mini-grid market in Tanzania, which will create investment opportunities in the renewables sector and help fill the country’s energy gap. We plan to mobilize the financial resources and expertise of the private sector to expand energy services to low-income communities.” 

IFC, a leader in renewable energy finance, helps developing countries transition to a low carbon future. Over the past three years, IFC has financed close to $3.5 billion in renewable energy projects worldwide, including biomass, geothermal, hydro, solar, and wind.