Eighty-one-thousand rural and urban homes, as well as public services, will gain new access to electricity December 20, 2007 - On the heels of a 2006 energy crisis that saw much of Tanzania’s population suffer through rolling blackouts, the East African country is working to build new energy investments that will power growth, create jobs, and reduce poverty. The Energy Development and Access Expansion Project, a US$111.5 million hybrid International Development Association credit and Global Environment Facility grant, was approved December 13 by the World Bank Board of Executive Directors. It will help Tanzania improve electricity services and provide more energy to households, businesses, and public services.  “Tanzania has begun to implement better energy policies, which will help it towards its objectives of growth and reduced poverty,” said World Bank Country Director for Tanzania John Murray McIntire. “This project will help ensure a more stable and reliable electricity supply to many Tanzanians.”
Monique Barbut, CEO and Chairperson of the Global Environment Facility, hailed the project as a way to bring services to many households and, at the same time, fight climate change. “It is our hope that this project will help spark a sustainable local market for renewable energy,” she said. "By boosting affordable and clean off-grid electricity access in the region, we are one step closer to a robust, lower carbon economy. That will help the environment by lowering greenhouse gases, but it will also dramatically improve living conditions for millions of the world’s most vulnerable who still lack modern energy.” The project is the first in a series of projects aiming at energy development and sustainable access scale-up through both grid and off-grid interventions. This first project will primarily focus on the urgent upgrade of electricity utility TANESCO’s transmission and distribution grid. It will also support a sustainable basis for the access expansion by supporting the Rural Electrification Agency and by targeting new approaches for future electrification scale-up. “In some rural parts of Tanzania, the rate of access to electricity is as low as two percent,” said World Bank Senior Financial Analyst and the project’s Task Team Leader Pankaj Gupta. “In addition to improving the quality and efficiency of electricity services in the three main growth centers of Dar es Salaam, Arusha, and Kilimanjaro, the project will also establish a sustainable basis for energy access expansion and support the global objective of reducing CO 2 emissions by reducing barriers to renewable energy development.”  Despite the high incidence of poverty in rural areas, surveys show that non-electrified rural households in Tanzania spend about 10 percent of monthly income on kerosene, candles, and batteries.
“Modern off-grid technologies can provide electricity for the same price, with improved quality and additional social, economic, health and environmental benefits,” said Gupta. “The project will support Tanzania’s efforts to extend newer technologies, while improving service quality for existing customers and allowing new customers to connect.” As a result of the project, roughly 81,000 homes, schools, businesses, and public services will access electricity for the first time. The Government of Tanzania has also expressed a commitment to using renewable energy, and a pledge to generate and monetize carbon credits. According to Dana Rysankova, an energy specialist with the World Bank’s Africa Energy Group, this project will allow Tanzania to support the most significant renewable energy options, namely, mini-hydropower generation, biomass cogeneration, and solar energy. By using renewable energy to provide electricity in rural areas, the project will also abate greenhouse gas emissions, an objective that is consistent with the World Bank’s Investment Framework for Clean Energy and Development and its goal of accelerating investments to increase energy access in developing countries while reducing global carbon emissions. By Christopher M. Walsh, World Bank |
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