NMB unveils 100bn/- loan for clean alternative initiatives

DAR ES SALAAM: AS Tanzania hosts the Mission 300 Energy Summit, NMB Bank has unveiled a 100bn/- soft loan facility to support the government’s efforts in addressing energy challenges and advancing the green agenda.

The Summit which opens today at the Julius Nyerere International Convection Centre (JNICC), bringing together at least 25 Heads of State and Governments, will chart Africa’s path to universal energy access, aiming to provide reliable, affordable and sustainable electricity to 300 million people by 2030.

Deputy Prime Minister and Minister for Energy, Dr Dotto Biteko, stated that the low-cost loans are a timely intervention to help transition the majority away from harmful and polluting fuels.

“It is a timely financing initiative that aligns with President Samia Suluhu Hassan’s vision of transforming Tanzania into a model nation with universal access to affordable, reliable and sustainable energy,” said Dr Biteko.

He said at the announcing of the initiative in Dar es Salaam at the weekend that the soft loans will be key in promoting sustainable alternatives, highlighting that only 16 per cent of households in Tanzania currently use clean cooking sources.

The official launch of this credit facility by NMB Bank today marks a significant milestone for the renewable energy sector.

Dr Biteko highlighted significant progress in promoting clean cooking energy, including over 36.64bn/- in subsidies to public institutions serving more than 100 people daily, enabling compliance with the firewood and charcoal ban.

The government, through the Rural Energy Agency (REA), has distributed about 110,000 gas cylinders and plans to distribute 452,445 more nationwide.

In addition, the Ministry of Energy is nearing completion of a plan to distribute over 200,000 subsidised energy-efficient stoves.

Dr Biteko added that President Samia Suluhu Hassan praised the pivotal role the NMB loan will play in advancing the government’s Clean Cooking Energy agenda.

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Announcing the financing initiative, NMB Chief Executive Officer, Ruth Zaipuna stated that the loans will carry a one per cent monthly interest rate, equating to an annual credit cost of 12 per cent, making them both affordable and appealing to borrowers.

At the launch of the new lending package, Zaipuna revealed that individual borrowers can access up to 1bn/- from any NMB branch nationwide.

She emphasised that the loans, with their competitive interest rates, aim to accelerate the distribution of clean energy solutions and enable widespread adoption across Tanzania.

The primary beneficiaries will be distributors and agents of gas cylinders and stoves, the most accessible and environmentally friendly energy solutions currently available.

“As Tanzania’s leading bank, NMB recognises its responsibility to support the government in implementing the National Clean Cooking Energy Strategy, which aims to provide affordable, sustainable and modern energy for all,” Zaipuna said.

She added, “We believe this fund will contribute significantly to the nation’s goal of increasing clean cooking energy use, promoting environmental conservation, improving health and welfare, boosting the economy and advancing UN Sustainable Development Goal 7.”

The clean cooking energy strategy, launched in May 2024, seeks to achieve 80 per cent adoption of safe fuels by 2034, delivering key eco-friendly benefits and fostering sustainable growth opportunities.

Speaking earlier, Finance Minister Dr Mwigulu Nchemba said that the Head of State is also actively championing the agenda on the international stage, where her efforts have been both impactful and widely acknowledged.

CEO Zaipuna said the significance of this agenda locally and internationally is driven by increasing environmental degradation, climate change and health risks resulting from the use of unclean cooking energy.

She emphasised that the data and the reality on the ground underscore the urgent need for all stakeholders to collaborate with governments and communities to tackle Africa’s lack of access to clean cooking energy.

This includes the tragic loss of over 600,000 women and children annually from smoke-related illnesses caused by unclean energy, with Tanzania alone accounting for more than 33,000 of these deaths each year.

To mitigate these fatalities and other harmful effects of unclean energy, the lender will support its financing efforts with a widespread awareness campaign on the importance of clean cooking.

This initiative will leverage NMB’s Village Day platform, commonly used to deliver financial education in rural areas