According to the World Bank data collected in 2014, the electrification rate in Tanzania currently stands at 16%. However, the recent survey of mainland Tanzania conducted by the Tanzanian government in 2016 gives a higher percentage of 32.8% with access in rural areas currently at 16.9% and 65.3% in urban areas.
According to the 2016 survey, the sources of lighting among households in Tanzania have changed. The graph below illustrates this change.
In rural areas where lack of access to electricity is highest, 45% of the households use rechargeable lights. This means that organizations/companies targeting the off-grid market in Tanzania should not only think in terms of kerosene replacement but offering alternatives to the rechargeable lights. Additionally, testing and standards should be set to ensure the rechargeable lights sold in the market are of good quality to minimise waste that could be generated from poor quality discarded lights.
Even with the increase in electricity access, the majority of people still use traditional biomass sources for cooking. In rural areas, 92% of the households use firewood while in the urban areas, 79% of the households use charcoal. As the wealth of the households increases, the households switch from using firewood to charcoal. Liquefied Petroleum Gas (LPG) is the primarily used by those classified as the richest households.
Regulatory and policy environment
Tanzania has some of the friendliest policies in Africa for off-grid energy access investments. The Rural Energy Act of 2005 states that the government’s role in rural energy programs is as a facilitator to encourage private and community investments. The information portal set up with the help of the IFC contains a ton of information on the energy policies and regulations is Tanzania.
The energy policies and regulations have been fairly successful in improving electricity access. In contrast, the policies have not been successful in weaning the population off of traditional biomass for cooking. For the most part, this is because the government’s focus has been increasing electricity access. The distribution and sale of modern cooking products like improved cookstoves has mainly been implemented by different government ministries, non-governmental organizations and local businesses. The low penetration of improved cookstoves or other modern cooking methods can be attributed to the lack of coordination of efforts by the different players.
Challenges and opportunities
- Tanzania is a large country with very low population density in some regions. This makes central grid extension very expensive in rural areas. This, however, also means that the market for off-grid solutions is huge and the Tanzania off-grid solutions industry is one of the most active in Africa.
- Heavy reliance on hydro power which leads to the unpredictability of electricity supply. There have been several droughts in the East African region in recent years. The national utility, TANESCO, has had to rely on thermal plants to meet demand. This has led to relatively high electricity costs. This means that there is a market for grid-stabilisation or alternative power supply projects for commercial and industrial entities.
- Lack of consumer education on the adverse effects of traditional cooking methods places the burden of educating the consumer on the organizations/businesses providing alternative cooking solutions. Government entities and NGOs are trying to rectify this although their efforts have been largely uncoordinated.
- The mini-grids portal mentioned above is a great resource, especially for mini-grid developers. In addition to information on regulations, it has an interactive map that can show which villages are earmarked for main grid extension, locations of existing and planned low/medium voltage power lines and villages earmarked by REA to be electrified using off-grid technologies. I would highly recommend it as the first stop for anyone looking to gather relevant information on energy access in Tanzania, especially for mini-grids.
- Mini-grid project developers can also access advisory services from the Transactional Advisory Services Facility. The advisory services are offered by Energy4Impact, a non-profit contracted by the IFC (see their other services here). Interested project developers can register on the site to access the services.
- The Energy Access Situation Report 2016 provides information at a regional level on energy access and demographics. The report also provides information on the most common appliances owned by households (radios).
- The Rocky Mountain Institute’s SEED report on mini-grids in Senegal, Kenya, Tanzania and Uganda gives a good summary of the challenges and opportunities in the mini-grid sector.
- The Country Country Action Plan for Clean Cookstoves and Fuels provides a good overview of the modern cooking fuels sector in Tanzania
- The AFDB reportt on energy access and renewable energy in Tanzania provides general information on the sector.
In conclusion, Tanzania is making progress in providing modern and clean energy for all its citizens. The country has in recent years attracted a lot of interest from development organizations and private investors and the energy access market is growing rapidly. It will be interesting to see how the sector evolves in the next few years and what kind of impact will be realised.