UNCDF invests in Tanzania's Mpale solar power mini grid project
UNCDF has invested in development projects aimed at expanding access to affordable, reliable, and clean energy, investing in a 50kW solar power micro grid project in Mpale Village, Tanzania.
Access to affordable and reliable electricity is vital for Tanzania's attainment of its socio-economic goals. Access to electricity is specifically difficult in Tanzania’s north eastern village of Mpale in Korogwe District, where the mountainous terrain poses a technical challenge in deploying grid lines.
The Mpale 50kW solar village micro grid project is vital in increasing rural electrification which will directly and indirectly impact 3,000 people in Mpale village. The project serves as a demonstration platform with a massive potential for replication and scale up in other villages, in the region, and also in other parts of the country. The project will contribute toward the sustainable and inclusive development of Korogwe District and beyond, by generating important transformative impacts.
Electricity was brought to the village of Mpale nearly 50 years after it was established as a village. Prosper Magali, the Project Manager at Ensol a private sector company says the idea of developing the Mpale 45KW solar mini grid was to connect rural communities with electricity noting the challenges of energy distribution to remote areas.
In three years of implementation, there are numerous accomplishments providing entrepreneurial opportunities to youth and women in small shops, salons, barbershops, carpentry etc. Connectivity is currently at 256 households of which 50 are SMEs, an increase from 50 homes in 2017.
For UNCDF, it was important to demonstrate the development impact of this off grid renewable power plant (as opposed to diesel generated power plants) at this most remote and difficult to reach mountainous villages in Korogwe district. Once this first one is built, the local developer can demonstrate to local banks and other investors that there is proof of concept and a successful track record.
To serve rural and remote communities with this kind of technology and solution, the developer must design a payment plan within the capacity of the community to pay. Considering the high investment costs and the lack of economies of scale (initially) to make such a project attractive to purely commercial financiers, there is a compelling need for development finance to subsidize catalytic development projects to prove concepts and demonstrate track record necessary for scale up.