*Seeks inclusive financial ecosystem for clean energy uptake
Dar es Salaam, 28th August 2020
The project is supported by C.S. Mott Foundation based in Flint Michigan, US. It seeks to develop a program to improve capacity of the microfinance institutions to extend financing to enterprises and end users of renewable energy technologies in Tanzania, by targeting microfinance institutions.
TAMFI CEO WINNIE TERRY
African countries including Tanzania, need to take seriously the need to start “energy financing” for the end-users, of who the majority, in the case of businesses, are micro and small scale.
This was said by the Tanzania Association of Microfinance Institutions (TAMFI) CEO Mrs Winnie Terry while launching a project titled, “Energy access: building an inclusive financial ecosystem for end-users and enterprises;” in Dar es Salaam.
The project seeks to create more awareness around energy financing and make energy poverty a thing of the past in Tanzania. Households suffering from poverty energy can be financed to buy pico solar products like lanterns to PAYG models to mini-grids, according to the project.
Such technologies and models are able to meet basic household energy needs as well as powering small/medium/large appliances for small businesses.
TAMFI is of the view that to sustain the performance of the Tanzania economy and ensure inclusiveness, access to less cost and reliable energy is necessary and therefore the decentralized sustainable energy can be a panacea for the Tanzania energy access challenge.
“In the process, we want to catalyse the unlocking of end-user financing for the poor. Think of farmers transforming from peasantry to business models. They need reliable and affordable electricity. Solar is one of the best options for the long term, yet we hardly have financial institutions financing such,” noted TAMFI CEO.
The project is supported by C.S. Mott Foundation based in Flint Michigan, US. It seeks to develop a program to improve capacity of the microfinance institutions to extend financing to enterprises and end users of renewable energy technologies in Tanzania, by targeting microfinance institutions.
Despite the national government in Tanzania working overboard to provide national grid power to most parts of the country, still, there are a lot of Tanzanians without power, and for others, solar energy is more reliable and less expensive in the long run.
Project documents indicate that due to electricity scarcity in Africa, over 600 million people in sub-Saharan parts do not have access to electricity and even where there is access; it is normally unreliable, inefficient and costly.
The project indicates that in Tanzania with a population of more than 50 million people, the national electricity coverage is estimated at just over 30% covering a minor part of the country and leaving out most of the territory.
According to Winnie, TAMFI is implementing the project so as to increase the capacitate of MFI in Tanzania to start financing energy needs for the end-users, thus reducing energy poverty in Tanzania.
“Our primary objective in implementing this program is to improve the capacity of the microfinance institutions on understanding and become familiar with the clean energy technologies and innovations in financing the enterprises and end-users on the renewable energy sector in Tanzania.
She noted that it will involve training financial service providers in a series of workshops so as to increase awareness of financing clean energy technologies and applications.
“We will help MFIs on how they can address the challenges around bankability and institutionalize the training in an effort to create long term measures to sustain priority in financing clean energy.’’