REA receives 176 bids for rural petrol station

TANZANIA: The Rural Energy Agency (REA) said on Thursday hundreds have applied for loans to establish rural filling stations however, a handful were shortlisted.

The agency said they received 176 applications after closing the tender in August but after scrutinization only 26 were deemed fit to go to the next round.

The REA Director of Renewable and Alternative Energy Technologies, Eng Advera Mwijage, said after the final round they expect to approve around ten to 15 applicants for rural filling stations.

“The loans meant to enable rural areas to also have quality fuel at authorised rates and reduce risks of selling the products arbitrarily while quality is not guaranteed,” Ms Mwijage said during a working session between reporters, editors, and REA arranged by the Treasury Registrar (TR) Office.

The loan limit is 75m/- and attracts a five per cent interest rate while the payable period is up to eight years.

Though REA is vetting applications, the filling station standards and establishment are subjected to the Energy and Water Utilities Regulatory Authority (EWURA) regulations.

“This a cost-sharing initiative where an applicant can choose to apply part of the amount and top up the remaining costs for constructing the filling station,” she said.

Additionally, the REA initiative is geared at shortening the travel distance some of the rural dwellers walk in search of fuel.

“Some of them turn to unlicensed suppliers, illegal vendors, whose product quality cannot be guaranteed while they handling at high risks,” she said.

The typical rural petrol station has two pumps and the application number shows that demand for petroleum products is growing at a fast rate in rural areas backed by the increase in economic activities in those areas.

“Due to demand and distance travel pushed the price of petrol in rural up well above EWURA’s cap price… while quality is not guaranteed,” Ms Mwijage said.

The rural fuel demand is also pushed by the emerging mode of transportation, boda-boda taxis.

According to the Tanzania Petroleum website, the cost of building petrol stations is around 200m/- to 1.0bn/-, especially in town areas.

REA also works on increasing the availability of cooking energy, especially petroleum gas in rural areas.

Currently, REA invites suppliers of LPG to apply for the grant which intends to facilitate access to LPG in peri-urban and rural areas through the provision of subsidised LPG starter pack prices. The deadline is the second Tuesday of next month.

“We are also engaged with TPDC to see the possibilities of distributing natural gas to settlements along the gas pipeline from Mtwara, Lindi, Coast to Dar es Salaam,” she said.

REA is not only aimed at reducing deforestation but also enabling rural areas to access easily clean cooking energy.

The initiative goes hand in hand with supplying rural areas with electricity and targeting to reach all villages by June next year and all hamlets coming 2030.

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