1. Private sector Initiative in Pre-finance
RETs in Tanzania.
By Mr. Manyanga Livinus
Executive Director KAKUTE
Presented on
National Workshop on TAREA Renewable
day.
6th June 2012 Dar Es Salaam.

2. The Content.
 Energy sector in Tanzania
 Current government
FYDP Objectives 2015
 The use of RETs in
Tanzania
 The challenge and
potential market
 Financial mechanism for
RETs the lesson
 Mobisol typical RETs pre-
finance business Module
 Communication structures
 Key principles
 Experience and lessons
 Critical issues.
 Conclusion.

3. Energy sector in Tanzania
 Tanzania has a per capita electricity consumption of
46/KWh per annum. Approximately 14 percent of the
population has access to electricity and consumption
is growing at the rate of 11–13 percent annually.
 Where electricity is available, the quality of supply is
poor and blackouts and other service interruptions are
common. Currently, maximum demand is 833 MW
and installed capacity is 1006 MW but average
availability is 650MW.
 There is no reserve margin, and hence during
breakdowns and droughts load shedding of about 160
MW is common 12 hours a day.

4. Current government FYDP Objectives
2015
The goal
 Develop reliable, economically accessible and
appropriately priced energy supplies to facilitate
the development of other activities in the
economy while ensuring environmental
sustainability
Operational Objective
 Explore the possibility of utilizing other potential of
energy – e.g. geothermal, solar, wind, coal, etc;
 Enhance Tanzania’s regional trade share by
connecting to at least 50 percent of grids of its
riparian countries;
 Improve the institutional management of power
generation, transmission and supply.

5. The use RETs in Tanzania
 Most of Tanzania depends on non-conventional
source of energy. These include biomass (wood, crop
residues, animal waste), animal power and solar.
 RETs in Tanzania have concentrated on biomass and
solar energy. Wind energy and micro-hydro
technologies are present, but not on a wide scale.
 There has been a lot going on in rural electrification in
the past several years, but nonetheless, little has
changed. On the contrary: the number of people who
have to live without electricity continues to grow. Has
the time come for a new approach?

6. The challenge and potential
market.
 Energy policy state that one of the challenges facing
the government is to reach rural households: Around
80% of the population has very low purchasing power
and depends mainly on wood-fuel for cooking and
kerosene for lighting, which have negative
consequences to the environment and the quality of
life, especially to the rural poor
 The deployment of renewable energy technologies in
Tanzania is at various stages of
advancement, although it is not well quantified and its
documentation is outdated. The policy focuses on
renewable deployment on biomass, solar, micro/mini
hydro and wind since as it was felt that technologies
for these energy sources could be disseminated in the
short term.

7. The company and market
 Firms face difficulties operating in rural areas
 Transportation cost is extremely high
 Extra costs arising from unanticipated
maintenance, component replacement, outreach efforts
and training
 Several companies are well developed but others are out
of business.
The main factor which affect the dissemination of RETs in
Tanzania include
 Awareness about renewable energy institution/association
 Government policies
 The poverty level
 Suitability of the technologies
 The level of public education and
 The existence of an enabling environment

8. Financing mechanism the lesson
Financial mechanism could be one solution but
 Credit access difficult, but not insoluble, Credit
risk a serious concern - risk sharing is helpful
 Diversify risk
 Credit guarantees
 Longer credit terms are needed to stimulate
demand – but few MFIs are willing
 Credit can be expensive

9. Mobisol typical RETs Pre-finance
module.
 The Mobisol Solar Home System Project aims to provide affordable
solar home systems to people living without access to electricity.
This project follows on from the installation of 200 Mobisol Solar
Home Systems (SHS) in 2011 and 2012 in Tanzania and Kenya.
 In Tnzania KAKUTE and Mobisol GbmH introduce the
business July last year and in six months 97 customers
receive SHS of different size 60W, 120W and 200W on
credit and warrantee for three years. 56 customer are
from two villages in Arusha district and 41 in two villages
from Meru district.
 What does the business involve?
 Selling four different size systems payable in
affordable repayment amounts.
 Customers can install the solar home systems on their
own roofs because it is so easy.
 Business provides pre-finance and three years of free
service to customers.

10. Pilot Phase – Partnerships
SCODE, Nakuru,
KE
100 households/
businesses
Kakute, Arusha, T
Z
100
households/
Pilot Phase - Partnerships businesses

11. Communication Structure
Question, request, complaint
Direct reply if possible
Project Manager
Technician

12. The key principles
 Strong Business Principles
 Pricing, credit terms, product quality, flexibility
product offerings.
 Capacity to Meet Needs of Clients
 Supply energy products best suited to the needs
and purchasing power of the client.
 Technical Training
 Energy company must agree to train
staff, particularly technical and marketing personnel
who has direct contact with customers.

13. The experienced lesson.
 Development of the value chain of actors in different
level is very important this include
Manufacture, supplier and distributer, promoter and
trainer, technical service and end user.
 RETs Promoter need to identified common factors
related to customer, staff, and manufacturer
relationships that contributed to the early success of
their RETs lending programs. First, the importance of
determining the specific energy needs and
preferences of customers through market
research, and using research findings as a basis for
selecting energy technologies and designing loan
products.
 Product demonstration should be the centerpiece of

14. Critical issues.
 The successful dissemination if any technology is
accompanied by a favorable environment. This is
especially the case where new technologies being
introduce. Most RETs can be placed in the
category, Part of this environment is the markets, the
people and the economic climate of the country.
 Sales messaging should prioritize cost savings and
product capabilities over environmental impacts.
 Cultivating a sales force that is knowledgeable and
enthusiastic about the product is critical, which means
that investments in staff training and education are
essential.
 Cultivating active partnerships with quality
manufacturers who can provide technical and
logistical assistance both prior to and after product
sales was considered indispensable.
 Demand assurance that manufacturers will honor
warrantees and prove dependable in supplying
products to meet growing customer demand as their

15. Conclusion,
 Tanzania has an abundance of renewable energy
resources limited exploitation has bedeviled
efforts to transform the promise of renewable
energy into reality. Expanded exploitation will
require several fundamental changes and policy
interventions.
 Some of the measure that would encourage large
scale dissemination of renewable energy include
education in school curricula, vocational Training
centre and other relevant learning institutions;
emphasis should be on practical aspects
including physical demonstration, installation and
operation. establishment of micro enterprises
linked together with MFI and investors.

16. Benefits and Limitations
 Q: What are the advantages and disadvantages
we have already spoken about?

17. Thank you for your attention