A US$ 420 000 preparation grant for the development of a portfolio of independent solar-hybrid mini-grids, in rural growth centres in Tanzania, has been approved by the Sustainable Energy Fund for Africa (SEFA).

The grant which was made to Jumeme – Rural Power Supply Ltd (JRPS), a local joint venture comprising 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 16 villages targeted 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.