The Republic of Tanzania is set to transform its energy sector. The country received an endorsement from Climate Investment Funds (CIF) of an investment plan which will help the country to scale-up the development of its renewable energy resources. The plan is designed to transform the country’s energy sector, shifting from its increasing dependence on fossil fuels and climate-sensitive hydro resources to a more diversified energy portfolio. Of significant interest are the county’s geothermal and solar resources.

The plan will be funded by U.S. $50 million from the CIF’s Scaling-Up Renewable Energy Program in Low-Income Countries (SREP) and addition funds will be provided by the African Development Bank (AfDB), World Bank, Government, private sector, commercial sources and other development partners. It features a geothermal development component and a renewable energy for rural electrification component.

The geothermal development component, which is expected to receive U.S. $25 million from SREP and U.S. $45 million support from the AfDB, will spur development of more than 100 MW of geothermal power, principally by the private sector, and will establish an enabling environment for large-scale geothermal development.

The renewable energy for rural electrification component will seek to: build an efficient and responsive development infrastructure for renewable energy-based rural electrification and demonstrate its effectiveness by supporting a time-slice of private-sector investments in off-grid electricity enterprises.

It is expected that SREP Tanzania will have a transformative impact on the country by supporting low carbon development pathways through reducing energy poverty and increasing energy security. By 2020, it is expected that per capita electricity use will increase from 78 to 350kWh, with annual electricity output from renewable energy increasing from 370 to 2,000 GWh/year once the geothermal plant becomes operational.

An additional $1.7 million was also approved in project preparation grants for the two components of the plan.