Huge boost for grid extension

ANALYSTS have explained the economic benefits that Tanzania stands to gain from the massive financing of 335 million US dollars (about 779.2bn/-) from the World Bank.

The funding that was approved on Monday by the World Bank Board of Directors will be issued under the International Development Association (IDA) with the purpose of supporting Tanzania’s efforts on scaling up grid extension and grid densification.

A statement issued by the bank on Tuesday noted that the money will be used on implementing the Tanzania Rural Electrification Expansion Programme (TREEP) to facilitate an additional one million last-mile grid connections.

“The programme will cover 8,500 education facilities, 2,500 healthcare facilities, as well as provide renewable energy options and clean cooking solutions to rural households,” read part of the statement.

Commenting on the financing, an Economist-cum-investment banker, Dr Hildebrand Shayo expressed his optimisms that the money will help to improve provision of social services and improve the economy.

“The financing aims to not only attract investments especially FDI but to ensure all Tanzanians have access to realiable energy to help boost their economic activities,” he said.

According to him, with an increase of digital economy and data mining led economy, it is indispensable that digital economy can’t be achieved without reliable and cheap energy.

“In the modern world, it would be a tall order to imagine our modern Tanzania society without a secure and importantly reliable supply of electricity,” noted Dr Shayo.

He said, reliable energy is critical in many aspects to areas that may not attract attention such as keeping medical equipment working in hospitals and Information Technology systems, which are available for teleworking and video conferencing that in a way help to reduce costs.

Adding; “If used wisely to intended aim, 335 million dollar support would help to make efficient electrification of a range of energy uses and this could make electricity our most significant energy source to help boost economic activities”.

For her part, senior lecturer at the Tumaini University Dar es Salaam College (Tudarco) Rachel Yusuph said the financing will help to boost economic activities in rural areas given the assurance of adequate supply of energy.

Effective use of the money on the intended purpose will also help in attracting investors as a result of creating jobs and lower cost of living for Tanzanians especially those in rural settings.

This is a way of ensuring effective implementation of the government strategy on improving provision of service delivery,” she explained.

Her views were in line with the WB Acting Country Director Preeti Arora, who said scaling up access to modern forms of energy is an important component for Tanzania’s long-term economic growth plan.

“We are pleased that our support to this objective over the past five years helped to provide electricity access to over four and a half million people including 5,900 education facilities, 1,664 healthcare facilities, and 14,316 business enterprises,” she said.

The initial IDA financing of 209 million US dollars for TREEP was approved on May 31, 2016 and the programme became effective on March 17, 2017.

Implemented as a Programme for Results (PforR) by the Rural Energy Agency (REA) and the Ministry of Energy, TREEP has supported the government’s National Rural Electrification Programme (NREP) by innovatively linking the disbursement of funds directly to the delivery of defined results and achievement of objectives.

This includes expanding rural access to electricity, increasing the supply of renewable electricity in rural areas, and strengthening the capacity of sector institutions to deliver on the NREP.

Despite Tanzania’s impressive progress in increasing electricity access from 7 per cent in 2011 to 38 per cent in 2020, a large gap remains between electricity accesses rates in urban areas (73.2 per cent) and rural areas (24.5 per cent) and between national grid coverage (78.4 per cent) and overall connectivity rate (38 per cent).

The NREP’s new Rural Energy Master Plan 2022-30 builds on the implementation experience of the Prospectus 2013-22 to provide a roadmap to reach 100 per cent energy access by 2030.

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