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Ludewa district rural electrification programme - mini hydropower


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This is a presentation by Davide Ceretti, of Fondazione ACRA, about the Tanzania mini hydro power project in the Ludewa district.

Ceretti spoke during the decentralised energy finance session at the Money Where It Matters (MWIM) event, held in London from 7-8 December 2016.

The purpose of the MWIM event was to reflect on our insights and explore further how financing mechanisms can more effectively channel resources to the local level, and identify opportunities to increase flows of finance to the local level in new contexts for development assistance and national investment.

Participants at the event also agreed on outstanding questions that require further research on finance for and with local actors to achieve the effective use and management of funds to deliver climate resilient sustainable development.

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Ludewa district rural electrification programme - mini hydropower

  1. 1. Fondazione ACRA Tanzania Ludewa District Rural Electrification Programme (mini hydro-power)
  2. 2. Projects: • Mawengi – LUMAMA  Total power:300 kW  8 villages connected  ~1,700 customer  Isolated mini grid • Lugarawa HP  Total power: 1850 kW  20 villages connected  ~7,000 customer  Grid connected Projects location
  3. 3. • Electricity is innovation: people want electricity but can’t “see” and know the opportunity for socio-economic development • Multi-stakeholders participation: communities, district and village authorities, NGOs, private sector, academy • Participatory decision making and planning • Use an integrated approach, breaking the walls among sectors:  Resources optimization  Value chain development  Synergies: Energy for Agriculture Production Transformation Commerce Basically: creating more with less Approach
  4. 4. COMMUNITIES COMMITMENT IS A KEY FACTOR IN SUCCESS OF ANY PROJECT • Ownership of the power plant through a community based social enterprise: consumers are members (LUMAMA) • Consumers association as a shareholder together with other stakeholders (Lugarawa) • Split ownership between energy production, transmission and distribution: – Production entails big investments and is interesting for private investors – Communities could own or participate to distribution networks (sense of ownership, strength sustainability) COMMUNITY INVOLVMENT MODELS NEW BUSINESS MODELS
  5. 5. New business development – market creation - Grant for adoption of electrical equipment for processing - Technical and managerial training - Selection of a number of enterprises (i.e.: carpentries, oil and flour producer, welding, fruit processing, tailoring, etc.) ELECTRICITY IS AN ESSENTIAL ASPECT IN BUSINESS OPPORTUNITY CREATION, BUT NOT SELF-SUFFICIENT establishment of demonstration plots for Sustainable and profitable production collect market information; supply chain analysis of opportunities
  6. 6. FINANCING: • Upfront costs: Feasibility studies, environmental impact assessments and bureaucratic procedures can affect heavily the investments • Need of subsidies for off-grid projects and for grid extension. • Mini-grids as an alternative CUSTOMERS: • Tariff structure: Develop an appropriate and affordable tariff structure and lowering connection costs next to zero • Developing “pay as you go” systems (pre-payment meters): to allows consumers to better regulate consumption and to utility to get 100% bill recovery • Customer Creation: needs of budget (or collaboration) to build PUE • Villages in the catchment have to be connected to the grid Isolated mini-grid can be profitable though low profits to be expected Lessons Learnt On:
  7. 7. ENVIRONMENTAL (HYDRO-POWER): • Need of financial resources for environmental conservation and sustainable management of natural resources SOCIAL: • Emphasis on participation into decision making processes and governance of the service; • High involvement of local authorities (village, district) TECHNICAL: • Stress on strengthening capacities of national staff (technical, managerial) Private Investments are available but a friendly environment must be created Lessons learnt oOn:
  8. 8. When there is no energy, there is no colour, no shape, no life. (Caravaggio) Eng. Davide Ceretti Energy Program Manager – Tanzania +255.766.752.372 +39.335 64.69.488 skype: davide.ceretti