TANZANIA: The Rural Energy Agency (REA) has boosted its funding for the rural filling stations project, increasing the loan amount from 75m/- to 133m/- within just a year of launching the initiative.
This enhancement aims to support business owners in constructing essential fuel facilities in rural areas.
REA unveiled the new guidelines yesterday that include significant changes, notably increasing the fuel tank capacities from 4,500-5,000 litres to 10,000-15,000 litres.
This enhancement will allow business owners to expand the area for building filling stations from 400 square metres to 924 square metres, significantly increasing their capacity to store fuel.
The REA's Senior Engineer, Eng. Deusidet Malulu, explained that the loan operates as a cost-sharing initiative, allowing applicants to apply for a portion of the funding and cover the remaining costs for constructing the filling station themselves.
"We decided to increase the fund because fuel agents cannot effectively distribute fuel to villages with a small volume. A fuel tanker can carry up to 60,000 litres, depending on its size," said Mr Malulu.
Initially, Mr Malulu stated that the loan operates as a revolving fund with a one-year grace period, after which borrowers begin repayments.
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This allows others to access the same funds, with an attractive interest rate of five percent and a repayment period of up to seven years.
He noted that while no loans have been disbursed yet, ten business applicants are in the final stages of signing agreements to receive their loans, which were expected in September.
Due to the recent guideline changes, these applicants will need to revise their contracts to meet the new guidelines. The applicants hail from Kagera (3), Mara (2), Dodoma, Simiyu, Geita, Iringa and Lindi regions.
Mr Malulu highlighted several benefits of the project, saying it aims to enhance fuel availability in rural areas at affordable prices, protect the environment and ensure the safety of communities and their properties.
Additionally, the project seeks to mitigate health risks associated with exposure to polluted air, increase government revenue from fuel sales, eliminate unsafe storage practices, and reduce transportation costs in rural areas.
