SEFA to support solar-hybrid mini-grids in rural growth centres in Tanzania
The Sustainable Energy Fund for Africa (SEFA) approved at the end of 2014 a USD 420,000 preparation grant to Jumeme - Rural Power Supply Ltd (JRPS) to support the development of a portfolio of independent solar-hybrid mini-grids in rural growth centres in Tanzania. JRPS is a local joint venture comprised of three partners: INENSUS Gmbh, with more than five years’ experience in mini-grid development and operation; TerraProjects, a renewable energy project developer; and St. Augustine University of Tanzania in Mwanza. Specifically, the SEFA grant will finance the costs related to technical studies, lender’s due diligence support, legal and financial advisory services. Tanzania’s national electricity coverage is estimated at about 21%, with transmission grid covering a minor part of the country and leaving out most of the territory, particularly in western and southern regions.
According to the 2012 Tanzania Power Master Plan, the Government is targeting 30% connectivity by 2015, involving connection of 250,000 new customers per annum starting 2013 to 2017. However, the vastness of the country, coupled with low population density, makes grid extension too expensive for many difficult-to-reach areas, creating a significant market potential for mini-grid systems. The Jumeme project will thus contribute to expanding rural electrification and increase access to energy services – using mainly clean solar energy – in some targeted 16 villages of in the first phase, which includes 82,000 people, 11,000 households, 2,600 businesses, 42 public offices, 32 schools, 12 health centres and 77 religious buildings. It is expected that a minimum of 500 new businesses will be created following the implementation of the first phase of the project.
After the approval, Joao Duarte Cunha, SEFA Coordinator, stated that “the success of Jumeme will have a strong demonstration effect for future mini-grids systems developers and operators, and pave the way for stronger AfDB engagement in this segment”. The project goal aligns with the long-term strategy of the African Development Bank (AfDB) which focuses on inclusive/green growth through the delivery of new energy sector operations with a stronger focus on energy access, particularly for those at the bottom of the pyramid, and leveraging of additional sources of financing from the private sector.
About the Sustainable Energy Fund for Africa (SEFA): SEFA is a multi-donor trust facility established to unlock private investments in small to medium-sized clean energy projects in Africa, operating through three components: (i) grants to facilitate the preparation of renewable energy generation and energy efficiency projects towards bankability (ii) equity investments to bridge the financing gap for renewable energy generation projects and; (iii) support to public sector in improving the enabling environment for private investments in sustainable energy. SEFA is endowed with USD 60 million from the Governments of Denmark and United States and is hosted and managed by the Energy, Environment and Climate Change Department of the AfDB.