The International Finance Corporation (IFC) is an investor and advisor supporting sustainable economic growth in developing countries by making private sector investments, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments.
As part of the IFC's Cross Cutting Advisory Solutions department, the Energy & Resource Efficiency (E&RE) group works to develop clean energy opportunities and improved resource use in emerging markets. The central aim is to increase energy access and optimize the use of resources to transform markets and improve people's lives. IFC's E&RE works with a range of industrial sectors including agribusiness, infrastructure, financial institutions, services, manufacturing, among others.
Access to modern energy services is vital to agricultural productivity, income generation, and the provision of critical social services, notably health and education. Electricity access in Tanzania is estimated at 18 percent nationally, and only 7 percent in rural areas. Women, who shoulder a disproportionate responsibility for household fuel and water collection, food preparation, and agricultural activities, are especially affected by poor energy supply.
The vastness of Tanzania, coupled with relatively low population densities, make grid extension a challenging and expensive way to electrify many of the countries rural and remote areas. This context presents a significant potential for off-grid energy access solutions. E&RE currently focuses on two commercially-oriented, off-grid projects in Tanzania: supporting the roll-out of a range of mini-grid technologies, and increasing access to modern lighting solutions, across the country.
The Scaling-Up Renewable Energy Program (SREP) Tanzania Investment Plan was prepared under the leadership of the Government of Tanzania, through a National Task Force led by the Ministry of Energy and Minerals (MEM) with support from the Multilateral Development Banks (MDBs), including the IFC. The broader SREP program in Tanzania seeks to catalyze large-scale deployment of renewable energy and transform the country's energy sector from one that is increasingly dependent on fossil fuels to one that is more balanced and diversified, with a greater share of renewable energy sources, including a specific component on mini-grids.
The mini-grid component is to be managed by IFC, though as part of the overall SREP-Tanzania program. The goal of the mini-grids component is to increase access to affordable modern off-grid energy services for households, commercial and institutional users in rural Tanzania through the development and establishment of a market for commercial mini-grids using renewable energy. This will be achieved through developing and promoting commercially viable mini-grid business models that can leverage private sector resources, including support to financial institutions to extend long-term financing to mini-grid developers. The target is to extend electricity service generated from renewable energy to areas that are without access.