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TerraProjects of Austria Develops Renewable Energy Mini-Grids in Tanzania as Part of Joint Venture

2. February 2015

The Austrian renewable energy project developer TerraProjects entered into a joint venture agreement with the German company Inensus and the St. Augustine University of Tanzania to make up JUMEME Rural Power Supply Ltd. (JRPS). JUMEME has successfully secured the support of The Sustainable Energy Fund for Africa (SEFA) in the form of a USD 420,000 preparation grant for the development of a portfolio of independent solar-hybrid mini-grids in rural growth centers in Tanzania.

Specifically, the SEFA grant will finance the costs related to technical studies, lender’s due diligence support, legal and financial advisory services. Tanzania’s national electricity coverage is estimated at about 21%, with transmission grid covering a minor part of the country and leaving out most of the territory, particularly in western and southern regions.

According to the 2012 Tanzania Power Master Plan, the Government is targeting 30% connectivity by 2015, involving connection of 250,000 new customers per annum starting 2013 to 2017. However, the vastness of the country, coupled with low population density, makes grid extension too expensive for many difficult-to-reach areas, creating a significant market potential for mini-grid systems. The Jumeme project will thus contribute to expanding rural electrification and increase access to energy services - using mainly clean solar energy - in some targeted 16 villages of in the first phase, which includes 82,000 people, 11,000 households, 2,600 businesses, 42 public offices, 32 schools, 12 health centers and 77 religious buildings. It is expected that a minimum of 500 new businesses will be created following the implementation of the first phase of the project.

After the approval, Joao Duarte Cunha, SEFA coordinator, stated that “the success of JUMEME will have a strong demonstration effect for future mini-grids systems developers and operators, and pave the way for stronger AfDBengagement in this segment”. The project goal aligns with the long-term strategy of the African Development Bank (AfDB) which focuses on inclusive/green growth through the delivery of new energy sector operations with a stronger focus on energy access, particularly for those at the bottom of the pyramid, and leveraging of additional sources of financing from the private sector.

About TerraProjects: TerraProjects is developing renewable energy projects across Europe and Africa together with international partners. Focus in Europe is given to large-scale grid connected wind power where as in Africa small-scale, off-grid rural electrification projects are being developed. With their team and partners they are able to cover the interface of technic, legal and finance of every renewable energy project, worldwide. Clients include renewable energy operators, equity and debt providers and multi-national organisations such as UNIDO or UNDP.