The document discusses village-level energy projects in Tanzania managed by the Rural Energy Agency (REA). It provides background on REA's establishment, governance, roles, and sources of funding. REA finances various rural energy projects through matching grants, performance grants, and long-term credit lines. Eligible project categories include solar, mini-hydro, biomass, and grid extension. The document outlines two of REA's large-scale programs - the Sustainable Solar Market Package and Lighting Rural Tanzania initiative - and highlights economic, social, and environmental benefits as well as challenges of rural electrification.

1. VILLAGE LEVEL ENERGY: EXPERIENCE FROM REA
Arusha: 4th June 2014
Advera Mwijage
Technical Assistance Officer
Rural Energy Agency
P.O. Box 7990 Dar-es-Salaam
Email: info@rea.go.tz
Website: www.rea.go.tz
APPROPRIATE TECHNOLOGIES FOR SUSTAINABLE
ENERGY IN OFF-GRID RURAL COMMUNITIES (SMART
VILLAGES INITIATIVE)

2. REA - Establishment
Rural Energy Act No. 8 of 2005 establishes:
Rural Energy Board (REB);
Rural Energy Fund (REF);
Rural Energy Agency (REA);
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3. REA - Governance
Ministry of Energy Minerals
Rural Energy Board
Rural Energy Agency
Rural Energy Fund (REF)
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4. REA – Roles and Responsibilities
 Financing for:
Technical Assistance for Pre- Investment Activities;
Training and Capacity Building;
Market Development for Renewable Energy
Technologies;
Implementation of Projects.
Experience Sharing and Networking;
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5. REA - Sources of Funds
Rural Energy Fund (REF)
Government Budgetary Allocations &
Development Partners;
World Bank Support
The Off-Grid Component of the Tanzania Energy
Development and Access Expansion Project
(TEDAP)
Special Purpose Funds
EU Energy Facility for RE Planning 6/4/20145

6. REA - Financing Opportunities
Financing available for Rural Energy Projects:
Matching Grants
Performance Grants
Credit Line for Long Term Financing
Carbon Financing
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7. REA - Matching Grant
Support pre-investment activities like:
Feasibility Studies;
Socio-economic Studies and Market Analysis;
Environmental and Social Impact Assessment;
Preparation of Bankable Business Plans;
Financial Intermediation & Closures;
Training and Capacity Building;
Market Development. 6/4/20147

8. REA - Performance Grant
 Support to buy down project capital costs to lower the unit
cost of the energy service provided;
 Size of Performance Grant depend on the type of technology
under consideration:
 Grid extension: US$ 500 per Connection;
 Solar PV: US$ 5 per Watt- Peak Installed.
O6/4/20148

9. REA - Long Term Financing
 Credit Line to provide long term financing to rural energy projects:
 Tenure: up to 15 years; and
 Grace Period: 5 years.
 Credit Line is Commercially and Competitively Operated:
 Shortlisted Banks: CRDB, NMB, NBC, Azania Bank, United Bank of
Africa and Stanbic.
 Three Projects Mwenga Hydropower Company, 4MW accessed TZS 4.8
Billion through CRDB Bank; Andoya Hydroelectric Power, 1MW
accessed TZS 2.7 Billion from CRDB and Ngombeni Biomass Project,
1.2 MW accessed TZS 0.96 Billion TZS from NBC
 Credit Line Apply Floating On-Lending Rate:
 Recalculated After Every Six Months.
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10. REA - Carbon Finance
CDM Program of Activities (PoA) for Renewable Energy Projects in
Tanzania;
 The aim of the programme is to enable the Renewable Energy
Projects to access Carbon Funds.
 Provides Advance payment of potential CERs (Certified
Emission reductions) used to bridge the equity gap.
 Implemented by REA in partnership with WB
 REA is the coordinating and Managing Entity of the
programme
 Crediting period 2015 – 2020 with possible extension to 2022;
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11. Eligible Cumulative Number of Projects
Implemented by Category
11
Out of the 171 projects,96 have been completed while 75 projects are in progress
5
21
2
6
14
5
117
1
wayleave projects
Solar
Mini Hydro
Wind
Biomass
Diesel power
Grid extension
LPG
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12. Projects Funded by REA/REF from
2008/09 to 2013/14
12
0
5
10
15
20
25
30
35
40
45
50
2007/8 2008/9 2009/10 20010/11 2011/12 2012/13 2013/14
8.1 Bil 1 Bill
0.7Bill
86.1 Bill
8Bill
86.9 Bill
106.2 Bill
NoofProjectsFunded
Financial Year
Number of
Projects
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13. 6/4/201413
Sustainable Solar Market Packages
(SSMP)

14. 6/4/201414
ust
Public Facility SSMP1
Districts 1
Wards 9
Villages 82
Total Public Systems 280
(67 KWp)
Dispensaries 35
Health Centres 6
Secondary Schools 9
Staff Houses 71
Police Posts 9
Public Lighting 240
Private Market
Systems
8,000
(0.24 MWp)

15. SSMP 2
 SSMP2 is an up-scale of SSMP1:
 Negotiation stage; to be implemented in 8 Districts;
 Kasulu, Kibondo, Tunduru, Namtumbo, Chato, Biharamulo,
Bukombe and Sikonge;
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16. 6/4/201416
ust
Public Facility SSMP1 SSMP2
Districts 1 8
Wards 9 108
Villages 82 452
Total Public Systems 280
(67 KWp)
2,034
(740 KWp)
Dispensaries 35 166
Health Centres 6 20
Secondary Schools 9 97
Staff Houses 71 924
Police Posts 9 17
Public Lighting 240 2,260
Private Market
Systems
8,000
(0.24 MWp)
71,163
(1.42 MWp)

17. SMALL HYDROPOWER PROJECTS
 MAWENGI: Capacity 300kW
 Connections made: 1,143 – Completed
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•300 kW – remote mini-grid
•1,143 Connected Customers
•Mawengi village, Njombe,
Tanzania
MAWENGI hydropower project

18. 6/4/201418
Mwenga 4 MW
2600 Connections to be made: So far 834 in 15 villages
& sells to the grid

19. Lighting Rural Tanzania Completion
The technologies used are: Solar, Solar-wind Hybrid, Small
Hydro & Biomass.
Beneficiaries: Public Institutions National wide
 Started 2010
10 projects were selected and awarded approximately
100,000 USD each.
 2012
15 projects were selected and awarded approximately
100,000 USD each.
 Coming 2014
Amount to be awarded in total will be around 3 Million USD
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20. Benefits
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21.  Economic benefits: Small Business
Centers i.e shops, stationeries, welding &
milling machines
 Communication services-Mobile Phone
charging
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22. Improvement of Social services
 Education: electric appliances in
rural schools has increased:
computers, photocopiers Access to
electricity in rural areas
 Dispensaries & Health activities,
safety etc
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23. Water supply and engagement of irrigation farming schemes in
rural area
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24. Challenges
Securing enough funds to match grant requests;
Compensation to properties affected by rural electrification
projects
Attracting private sector investments in provision of modern
energy services in the rural areas; and
Long transmission distances and irregular population densities in
rural areas;
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25. Way Forward
When funds are available: Things are possible
Despite of the achievements, more work has to be done
Efforts to mobilize funds for project funding will continue
Promoting and facilitating more innovation in rural
electrification projects
Facilitating project developers with technical and financial
assistance;
Creating an enabling environment to attract private sector
participation in rural energy projects;
Continuation of initiatives to connect all social facilities in
rural areas by either grid electricity or stand-alone systems;25 6/4/2014

26. Thanks You For Your Kind Attention
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