Government unveils $5m in rural growth fund

Rural Energy Agency (REA) director of Marketing Development and Technologies, Mr Elineema Mkumbo, speaks during a meeting with REA stakeholders in Dar es Salaam yesterday. PHOTO | ERICKY BONOPHACE.

Summary

  • Rural Energy Agency (REA) has launched a support mechanism labeled Renewable Energy Project Development Facility (REPDF), worth $5.25 million, funds from donors to provide funding for eligible project development activities in mainland Tanzania specifically rural regions.

Dar es Salaam. The government, through the Rural Energy Agency (REA), has launched a support mechanism labeled Renewable Energy Project Development Facility (REPDF), which will provide funding for eligible project development activities in rural areas.

The facility worth $5.25 million (about Sh12 billion), involves funds from donors such as the World Bank, Swedish International Development Cooperation Agency (Sida), and DFID.

Speaking during the launch yesterday, REA’s director of Marketing Development and Technologies Elineema Mkumbo said the funds will be provided to project developers dealing with renewable energy (solar, wind, small hydro and biomass) mini-grids with generation capacities of less than 10MW each.

“This support mechanism will also help providers to acquire an efficient consultant service. Because most of the project providers have been unable to prepare well their documents and proposals, they have failed to acquire funding assistance to undertake power projects in the rural areas,” he said.

According to Mr Mkumbo, through REPDF the providers will receive payments for a portion of their external costs of consultants engaged to undertake specific pre-investment advisory assignments such as feasibility studies, business plans, social and environmental assessments.

He said: “In support of enhancement of the development of mini-grid electrification projects in Mainland Tanzania, the REPDF will provide 90 per cent of the funds needed and will be paid directly to the consultant, while project developers will contribute only 10 per cent.”

Mr Mkumbo noted that applications for the funding assistance can be done through the agency’s website, where project providers will be evaluated by experts to verify their eligibility.

Rural Energy Agency (REA) is an autonomous body under the ministry of Energy and Minerals of the United Republic of Tanzania, which became operational in October 2007.

Its main role is to promote and facilitate improved access to modern energy services in rural areas of Mainland Tanzania.