TANZANIA has received endorsement from the Climate Investment Funds (CIF) for an investment plan that will help government scale-up the development of its abundant renewable energy resources.
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.
According to the Chief Climate Change Specialist at AFDB and CIF Coordinator, Mafalda Duarte, the plan will be funded by US $50 million from the CIF's Scaling-Up Renewable Energy Programme (SREP) in low-income countries and the balance from the African Development Bank (AfDB), World Bank, government, the private sector and other development partners.
Mr Duarte said the geothermal development component, which is expected to receive US $25 million from SREP and US $45 million support from AfDB, will catalyze 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.
He noted that 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 privatesector investments in off-grid electricity enterprises.
He added that 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.
According to him, 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 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 $1.7 million was also 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.
The five MDBs include the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter- American Development Bank (IDB) and World Bank Group (WBG).