2.4MW wind farm nears completion in Tanzania
Tanzania’s first ever wind farm to reach financial close and start construction is nearing completion following US$1.2m loan from REPP
London, 14 April 2020: Tanzania’s first ever wind farm to reach financial close and start construction is nearing completion following a US$1.2m loan from the Renewable Energy Performance Platform (REPP), which is entirely financed by £148m from the UK Government’s Departments for Business, Energy and Industrial Strategy (BEIS).
Once operational, the 2.4MW wind farm will provide much-needed energy security to customers of a rapidly expanding private rural grid network developed and operated by project developer Rift Valley Energy Group.
The farm’s three turbines have recently arrived at the project site in Mwenga in the Mufindi District of Tanzania’s Iringa region, and installation and testing is expected to be completed by early May.
The rural grid network is currently powered by a 4MW hydropower plant that has been operational since 2012, and is the first private large-scale rural network in Tanzania. The plant provides clean, grid-quality electricity to more than 4,500 homes and businesses across 32 villages, including energy-intensive end users such as tea-processing companies and sawmills, as well as the region’s rapidly growing SME sector. Any surplus power is sold to TANESCO under a power purchase agreement.
The new wind farm will enable the planned expansion of the rural network to continue, which is expected to connect a further 1,500 customers over the next two years, and counter the hydro plant’s varying output due to the region’s seasonality of rainfall.
The business model behind the hybrid development represents an innovative energy solution for the region, since it is led by the private sector and combines multiple generation sources and offtakes – including that of the national utility – at a large scale.
Geoff Sinclair, Managing Director of Camco Clean Energy, REPP’s investment manager, said: “Complementing the existing hydro plant with a wind farm is a smart move that will enable Rift Valley to greatly improve the quality and reliability of its rural grid network, which has already had a transformational impact on thousands of homes and businesses in Tanzania.
“The success of the project should have a strong demonstration effect in other countries and provide a replicable solution for complex power supply issues elsewhere in Africa.”
Michael Gratwicke, Managing Director of Rift Valley Energy, said: “The REPP facility has been critical to concluding the financial structure for the project, and provides the project with the necessary risk reduction mechanisms to best manage the anticipated rapid evolution of our associated growing rural distribution markets.”
To date, the project has created approximately 50 temporary jobs during construction, and will create a further six permanent positions for people from the surrounding area during operation.
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About the UK’s International Climate Finance
International Climate Finance is a UK Government commitment to support developing countries to respond to the challenges and opportunities of climate change. At the UN Climate Action Summit in New York in September the UK announced a doubling of its International Climate Finance from £5.8bn over the period 2016-2020 to at least £11.6bn over the period 2021-2025. This places the UK amongst the world’s leading providers of climate finance. Programmes are focused on:
- Building the resilience of the poorest people and communities
- Ensuring that the vast expansion in infrastructure in developing countries is low-carbon
- Halting deforestation
The Renewable Energy Performance Platform (REPP) works to mobilise private sector development activity – and investment – in small to medium-sized projects (typically up to 25MW). It is supported with £148m funding from the UK’s International Climate Finance through the Department for Business, Energy and Industrial Strategy (BEIS), and to date has agreed contracts with 25 renewable energy projects across 13 countries, employing five different technologies (solar home systems, solar PV mini-grids, grid-connected solar PV, run-of-river hydro, and onshore wind).
About Camco Clean Energy
Camco Clean Energy is a global leader in sustainable energy projects finance. Its long-established position within Africa’s renewable energy sector enables the company to provide project developers and sponsors with a trusted combination of global access and local presence, enabling them to source the right financing solutions to develop and build projects.
Since formation, it has provided creative finance solutions to 180 projects worth US$15bn, and in geographies as diverse as Madagascar to Malaysia and the US to Uganda.
About Rift Valley Energy
Rift Valley Energy develops, owns and operates small to medium sized renewable energy generation and rural electrification projects in Eastern and Southern Africa. Its main operations are based in the Southern Highlands of Tanzania, where it operates the only private licensed distribution network in Tanzania, providing electricity services for the first time to a rural population of approximately 100,000 people that are spread across the various project areas.
For more information, visit the project page here.