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 Non-Profit/For-Profit Partnership in SHPP: CEFA's Experiences and Perspectives in Tanzania.
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Non-Profit/For-Profit Partnership in SHPP: CEFA's Experiences and Perspectives in Tanzania.

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  • 1. Jacopo Pendezza Project Manager CEFA Tanzania
  • 2. PRESENTATION OUTLINE 1.Introduction 2.Rural Energy sector in Tanzania 3.The Potential of Small Hydropower in Tanzania 4.CEFA and Rural Electrification in Tanzania: 25 years of commitment 5.Looking for a bigger impact: the NPFPP model 6.What next: the concrete example of the Ninga SHPP 7.Conclusions
  • 3. Expanding renewable energy access for rural communities in Africa is a challenging task However, Energy production and distribution in rural areas in Tanzania is now a promising business opportunity Because: • Potential Local Market • National Priority - Favorable legal framework and policy • Int’ Donors and Commercial Banks Financing 1. Introduction
  • 4. PROBLEM Great need for mobilizing financial resources to expand energy access for rural communities. SOLUTION A partnership between non-profit and for-profit actors is here proposed in order to rapidly expand energy access. Concrete possibility of a NPFPP between CEFA, an Italian NGO specialized in rural electrification, and a private partner for the realization of a Small Hydro Power project in Ninga, Tanzania.
  • 5. Tanzania power supply: • national interconnected system • several mini-grids located far from the national grid. National electrification 18.4%, set to arise 75% by 2035. Rural electrification less than 7% of the rural population (2.2 million). Installed generation capacity is 1,564 MW of which 1,438.2 MW is available in the main grid and 125.8 MW accounted for by Small Power Producers (SPPs), mini grids, and imports. 2. Rural Energy sector in Tanzania
  • 6. The rural electrification sector is defined by law and well regulated under the Ministry of Energy and Minerals (MEM). • REA (Rural Energy Agency), • EWURA (Energy and Water Utilities Regulatory Authority), • TANESCO (Tanzania Electric Supply Company), are the 3 key actors under MEM dealing with rural electrification, renewable energy and market development.
  • 7. EWURA is regulating the private sector participation through Standardized Power Purchase Agreement (SPPA) for IPPs, SPPs (small power producers <10MW), SMPPs (very small power producers < 100kW), DNO (Distribution Network Operators), SPD (small power distributor). 2011 Tariff TZS/kWh 2012 Tariff TZS/kWh 2013 Tariff TZS/kWh Standardized Small Power Purchase Tariff 121.13 152.54 174.89 = EUR 0.08
  • 8. 3. The Potential of Small Hydropower in Tanzania Hydropower is the most popular and the oldest renewable energy source used to produce electricity for rural grids. Potential of small hydropower resources up to 10 MW in Tanzania is 480 MW. Of the 11 projects for which Small Power Purchase Agreements (SPPAs) have been signed, four are mini- hydro projects, with a combined capacity of 20.5 MW
  • 9. Examples: • the MEM is conducting small-hydro feasibility studies in eight regions; • GVEP International, in partnership with REA, is supporting the development of six hydro mini grids; • REA has awarded some 20 matching grants to developers for feasibility studies; • ESMAP is financing renewable-energy resource mapping, starting with small hydropower; • EU is financing four Hydro Power projects (including one developed by CEFA).
  • 10. 4. CEFA and Rural Electrification in Tanzania: 25 years of commitment CEFA (European Committee for Training and Agriculture) is an Italian NGO that promotes initiatives of integrated rural development. Founded in 1972 by a group of agricultural cooperatives based in Bologna, CEFA is present in the Mediterranean area, East Africa and Central and South America. In Tanzania since 1976, CEFA promotes interventions in the fields of Rural Electrification, Water supply, Sustainable Agriculture, Agro-processing .
  • 11. Matembwe, Njombe
  • 12. Matembwe, Njombe Summary details Type of facility Reservoir micro hydro plant Commissioning year 1984 Funded by Italian Ministry of Foreign Affairs; Belgian Ministry of Foreign Affairs; European Union; CEFA Ownership Matembwe Village Company – MVC Ltd (CEFA, Catholic Dioceses of Njombe, District of Njombe and Village of Matembwe) Output power 120 kW Villages served Matembwe and Image Distribution network 19 km of MV Households connected 556 Public institutions and economic activities connected 64 Aqueducts powered 4 Connection with TANESCO Yes (in 2015).
  • 13. Bomalang’ombe, Iringa
  • 14. Bomalang’ombe, Iringa Summary details Type of facility Reservoir mini hydro plant Commissioning year 2001 Funded by Italian Ministry of Foreign Affairs; European Union; CEFA Ownership Bomalang’ombe Village Company – BVC Ltd (CEFA, Catholic Dioceses of Iringa, District of Kilolo and Village of Bomalang’ombe) Output power 250 kW Villages served Bomalang’ombe and Lyamko Distribution network 17.3 km of MV Households connected 252 Public institutions and economic activities connected 76 Aqueducts powered 3 Connection with TANESCO No
  • 15. Ikondo, Njombe
  • 16. Summary details Type of facility Run-of-the-river micro hydro plant Commissioning year 2004 Funded by Italian Ministry of Foreign Affairs; European Union; CEFA Ownership CEFA (to be handover to MVC Ltd) Output power 83 kW Villages served Ikondo Distribution network 8 km of MV Households connected 130 Public institutions and economic activities connected 46 Aqueducts powered 1 Connection with TANESCO Yes (in 2015) Ikondo, Njombe
  • 17. Ikondo II
  • 18. Ikondo II Summary details Type of facility Run-of-the-river micro hydro plant Commissioning year 2015 Funded by European Union; CEFA Ownership CEFA (to be handover to MVC Ltd) Output power 430 kw Villages served Ikondo, Nyave, Ukalawa, Isoliwaya, Kanikele Distribution network 47 km of MV (in 2015) Households connected 280 (in 2015) Public institutions and economic activities connected 75 (in 2015) Aqueducts powered 1 Connection with TANESCO Yes (in 2015)
  • 19. 5. Looking for a bigger impact: the NPFPP model
  • 20. 6. What next: the concrete example of the Ninga SHPP
  • 21. Summary details (Foreseen) Type of facility Run-of-the-river small hydro plant Commissioning year 2017 Proposed financial model Developer equity, International donors, REA, etc and Commercial loans Ownership To be handover to local entity Output power 4,000 kW Villages served Ninga, Lima, Isitu, Ikuna, Lole, Upami and Ilengitu Distribution network 18 km of MV Households connected 1680 Public institutions and economic activities connected 268 Connection with TANESCO Yes
  • 22. Ninga SHPP - Estimated project cost
  • 23. Disc. rate on investment 8.00% Depreciation 365,000 €/year 20 years Grant 0 Annual generation 21,750 MWh Price of Energy 0.0795 €/KWh 174.89 TZS/kWh 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Yr Energy Sold MWh Unit Price € Sales Revenues O & M Working Ratio Cash Flow € PBT Total Cost including Depreciation O&M unit cost per kWh Cost of Kwh NPV (Col. 7) IRR (Col. 7) Year Cumulative Cash Flow € cent € cent Pay Back 6.3 yrs -2 75 months 2014 -1 -7,300,000 -7,300,000 2015 -7,300,000 1 21,750 0.0795 1,729,026 183,320 0.11 1,545,706 1,180,706 548,320 842.85 2.52 -5,434,065 2016 -5,754,294 2 21,750 0.0827 1,798,187 186,986 0.10 1,611,201 1,246,201 551,986 859.71 2.54 -4,155,042 -41.25% 2017 -4,143,093 3 21,750 0.0860 1,870,115 190,726 0.10 1,679,389 1,314,389 555,726 876.90 2.56 -2,920,642 -17.86% 2018 -2,463,705 4 21,750 0.0894 1,944,919 194,541 0.10 1,750,379 1,385,379 559,541 894.44 2.57 -1,729,363 -3.91% 2019 -713,326 5 21,750 0.0930 2,022,716 198,431 0.10 1,824,285 1,459,285 563,431 912.33 2.59 -579,755 4.78% 2020 1,110,959 6 21,750 0.0967 2,103,625 202,400 0.10 1,901,225 1,536,225 567,400 930.58 2.61 529,592 10.45% 2021 3,012,183 7 21,750 0.1006 2,187,770 206,448 0.09 1,981,322 1,616,322 571,448 949.19 2.63 1,600,038 14.30% 2022 4,993,505 8 21,750 0.1046 2,275,280 210,577 0.09 2,064,703 1,699,703 575,577 968.17 2.65 2,632,904 17.01% 2023 7,058,208 9 21,750 0.1088 2,366,292 214,789 0.09 2,151,503 1,786,503 579,789 987.53 2.67 3,629,466 18.96% 2024 9,209,711 10 21,750 0.1131 2,460,943 219,084 0.09 2,241,859 1,876,859 584,084 1,007.28 2.69 4,590,961 20.39% 2025 11,451,570 11 21,750 0.1177 2,559,381 223,466 0.09 2,335,915 1,970,915 588,466 1,027.43 2.71 5,518,585 21.47% 2026 13,787,485 12 21,750 0.1224 2,661,756 227,935 0.09 2,433,821 2,068,821 592,935 1,047.98 2.73 6,413,496 22.29% 2027 16,221,306 13 21,750 0.1273 2,768,227 232,494 0.08 2,535,732 2,170,732 597,494 1,068.94 2.75 7,276,814 22.92% 2028 18,757,039 14 21,750 0.1324 2,878,956 237,144 0.08 2,641,812 2,276,812 602,144 1,090.32 2.77 8,109,623 23.41% 2029 21,398,850 15 21,750 0.1377 2,994,114 241,887 0.08 2,752,227 2,387,227 606,887 1,112.12 2.79 8,912,972 23.79% 2030 24,151,077 Ninga HPP - Unleveraged Profitability
  • 24. 7. Conclusions It’s now time to expand renewable energy access for rural communities in Tanzania. New CEFA’s project will provide energy to 2,000 HH and small enterprises. Thanks to a NPFPP is possible: - Rapidly expand financial resources - Expand energy access - Increase empowerment of local communities - Meet national target for electrification and energy production
  • 25. Thank you for your Attention! Jacopo Pendezza CEFA Tanzania P.O. Box 59, Njombe - Tanzania TZ +255 689599034 +255 71863847 IT +39 3281737292 jpendezza@gmail.com www.cefaonlus.it/uk