Tanzania to Upgrade, Rehabilitate Power System with New US$111 million Project

Monday, December 17, 2007

81,000 rural, urban homes and public services will newly access electricity

The World Bank Board of Executive Directors has approved a US$105 million equivalent IDA credit  [1]and a US$6.5 million Global Environment Facility (GEF) grant to improve electricity services in Tanzania, where electrification rates in some areas are as low as two percent.
The Energy Development and Access Expansion Project will improve the quality and efficiency of the electricity service provision in the three main growth centers of Dar es Salaam, Arusha, and Kilimanjaro.  It will also establish a sustainable basis for energy access expansion and support the global objective of reducing CO2 emissions by reducing barriers to renewable energy development.
“Tanzania continues to implement sound macro-economic policies, which provide a suitable environment for progress towards its macro objectives of high growth and reduced poverty,” said World Bank Country Director for Tanzania John McIntire.  “This project will help ensure a more stable and reliable electricity provision to the population.”
Despite the high incidence of poverty in rural areas, various surveys show that non-electrified rural households in Tanzania spend roughly 10 percent of monthly disposable income on kerosene, candles, and batteries to satisfy their energy needs.
“Various modern off-grid technologies can provide electricity service for the same price, with improved quality and additional social, economic, health and environmental benefits,” said World Bank Senior Financial Analyst and the project’s Task Team Leader Pankaj Gupta.  “This project will support Tanzania’s efforts to implement these newer technologies, while improving the service quality for existing customers and allowing new customers to connect to the grid.”
“It is our hope that this project will help spark a sustainable local market for renewable energy,” said Monique Barbut, CEO and Chairperson of the Global Environment Facility.  "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.”
About the GEF
The GEF is a 178 member-strong international financing body devoted to global environmental issues that support sustainable development. GEF grants flow to projects in developing countries related to biodiversity, climate change, international waters, land degradation, the ozone layer and persistent organic pollutants. Since 1991, GEF has achieved a strong track record with developing countries and countries with economies in transition, providing US$7.4 billion in grants and leveraging US$28 billion in co-financing for over 1,800 projects in over 150 countries.
Through its Small Grants Program, GEF has also made more than 7,000 small grants, up to US$50,000 each, directly to nongovernmental organizations and community organizations.

Source: World Bank