A plan to build a 6.4MW run-of-river hydropower plant in a very remote area of Tanzania is expected to enhance economic activity and displace diesel usage.
Under the proposal, more than 90,000 people living in nearby villages in the Njombe and Ruvuma regions – where the current electrification rate is less than 20% – will get access to grid-based electricity for the first time. In addition, nearly a quarter of a million more people will gain access to better, more reliable and clean energy as a result of the project.
The project developer, Ludewa Clean Energy Ltd, is also investigating the construction of a new school, clinic and 18km access road.
The power plant on the Kitewaka River will be the first industrial business in the area. It is expected to provide 200 local jobs during construction, and a further 15 jobs during operation.
Although other small-scale hydro projects are currently in operation in Tanzania, they each received significant donor support, indicating that small-scale hydropower development is still commercially challenging in remote rural areas.
REPP support will be key in helping the developers overcome elevated risks and higher costs compared to projects that are closer to main population centres.
Contracted date: 12 July 2016
Lending type: Development capital
REPP funding: USD $345,000
REPP’s financial and technical support for the Kitewaka project has been critical in overcoming hurdles in the project’s development and advancing it toward the implementation phase, when it will bring tremendous benefits to the local communities.- Amini Kimaro, CEO, Ludewa Clean Energy Ltd