TIB Development Bank and SNV Netherlands Development Organisation have signed an agreement for financing the Pico-solar PV lighting applications in the Lake Zone.
"As a whole the RBF Fund for pico solar will stimulate an additional 3 million Euro (about 6.6bn/-) in private sector investment to the Lake Zone," said Mr Peter Noni, the TIB Development Bank's Managing Director in Dar es Salaam over the weekend.
He added, "the project will save consumers greater than 22 million Euro (about 48.4bn/-) in domestic kerosene expenditure and place clean lighting and electrification services within reach for more than 175,000 off grid rural people."
In the project, the TIB Development Bank has been designated to host the RBF incentive fund valued at 1 million Euro (about 2.2bn/-).
The signing of the deal is meant to open the Results Based Financing (RBF) Fund which is financed through the Energising Development (EnDev) initiative as managed by GtZ and funded by the Department for International Development (DFID).
He said the RBF Fund is a temporary financial product in mainstream banking that serves to assist the Private Sector in developing the market for Pico-Solar products (small solar home kits, lanterns, phone chargers) in isolated rural areas of the Lake Zone.
The RBF Fund for Pico- Solar in the Lake Zone will be open to the private sector from May, this year, until August of 2017 and will focus on expanding the reach of quality lighting products into rural markets throughout the six Lake Zone regions including Geita, Kagera, Mara, Mwanza, Shinyanga and Simiyu.
It will support suppliers and retailers to mutually develop the distribution chain for affordable and reliable pico solar product to the ultimate benefit of greater than 100,000 rural Lake Zone households. This will be achieved by providing post-sales incentives payable to the private sector.
The RBF Fund for Tanzania will be one of only seven such private sector funds in the energy sector scheduled to begin operations throughout the world in 2014.
In the coming weeks TIB and SNV will warmly welcome the applications to the RBF Fund by all pico-solar suppliers in mainland Tanzania dealing in Lighting Africa approved products and with interest in expanding their operations into deeper last mile markets of the Lake Zone.