ENERGY GENERATION AND ACCESS
30% of the Tanzanian population had access to national grid electricity by June 2015 but consumption per capita of 97 kWh is very low compared to the World and in Sub – Saharan Africa average consumption of 2000 kWh per and 552 kWh annum respectively. Electricity demand in the country is increasing rapidly mainly due to accelerated manufacturing (productive) investments, increased population and increasing need to access electricity. The National’s Power System Master Plan (2010 – 2035) anticipates that Tanzania will increase electrification access status from 18.4% in 2010 to 75% by 2035 while demand from connected customers will increase significantly as Tanzania becomes a middle income country as targeted in the Tanzania Development Vision 2025. This will be mainly achieved through use of natural gas, clean energy technologies and diverse renewable sources such as geothermal, wind, solar and renewable biomass. Currently primary energy supply and consumption in Tanzania is still dominated by biomass-based fuels particularly fuel wood (charcoal, and firewood) which accounts for more than 90% of primary energy supply. Commercial energy sources of petroleum and electricity account for about 8% and 1.2% respectively while Coal, solar and wind account for less than 1%.
Energy generation and access projects worth over USD 2.0 billion were financed by CRDB Bank through balance sheet and off balance sheet credit facilities during the past 5 years. As at 31st July 2017 CRDB Bank Plc total outstanding exposure to energy generation and access was around TZS 261 billion (USD 119 million) out of total project cost of USD 642 million. Major projects financed under balance sheet exposures are shown in subsequent sub-sections of this section while off balance exposure mainly constitute guarantees and letters of credit.
Kinyerezi Gas powered electricity plant
The Bank has teamed up with other local banks and multinational banks/DFIs to raise about USD 185 Million (equivalent to TZS 408 billion) to finance Tanzania Electricity Supply Company (TANESCO), a Government owned power utility company. In addition the Bank has also granted a working capital loan of USD 15 Million to Jacobsen Elektro AS which is the main contractor of the Kinyerezi gas powered electricity project.
Upon completion of the project a total of 335 MW will be added to the National grid which, together with other projects which are under implementation, will boost power supply in the country from the current approximately 1,357 megawatts to 1,754 megawatts by 2018.
Increase in electricity supply is highly needed for the country’s industrialization strategy as stipulated in the National Five Year Development Plan year 2016/17 – 2020/21. The project uses natural gas which reduces the use of Heavy Fuel Oil (HFO) mostly used in generation of electricity in the country. Most of the HFO plants are now being phased out due to increased use of natural gas.
The Kinyerezi Power plants located in Dar Es Salaam City.
Kilwa Energy Company Limited
The Bank has approved a loan of USD 45 Million in favor of Kilwa Energy Company limited as part of the international syndication financing arrangement of gas powered electricity generating plant with total project cost of USD 457 Million. Other financiers are Development Bank of Southern Africa (DBSA) loan of USD 230 Million and Tanzania Investment Bank (TIB) a loan of USD 20 Million. Kilwa Energy Company Limited, (KECL) is a Limited Liability Company incorporated in Tanzania since 2010 with the objective of establishing and running power projects as an independent power producer. Kilwa Energy Company Limited (KECL) is embarking on the development of a 342.8 MW natural gas electricity power plant located at Somanga Funga, Kilwa District. The project will be the first Independent Power Project (lPP) wholly owned by Tanzanians. The Project will provide direct employment to 61 people and indirect employment to 300 people in the region.
Kilwa Energy Site located in Lindi region
Transformers and turbines ready at project site
Generators and other auxiliary equipment at the site
Mwenga Hydropower plant
Mwenga Hydroelectric Power, which is also among of the small hydroelectricity power projects under the initiative of the Government of Tanzania in collaboration with the World Bank, is located in Mufindi District, Southern Highlands of Tanzania. The project generates 4 Megawatts of electricity and supplies to the national grid and neighbouring villages.
The total project cost is USD 7 Million out of which, CRDB Bank injected a total of USD 3.11 Million as Term loan facility and a Guarantee facility of Euro 1.8 Million. The project generates 4 Megawatts and has connected about 32 villages with a total population of close to 65,000 have access to reliable and grid quality power. The project supplies electricity to 32 village schools, 450 small and medium enterprises, 19 dispensaries and 18 village local government offices in Mufindi District.
Mwenga Hydroelectric site locations and distribution lines in Mufindi, Iringa
Access to affordable, reliable and sustainable energy is vital to ending extreme poverty and promoting shared prosperity.
Andoya Hydroelectric Power Company Limited
Andoya Hydro Electric Company Limited (AHEPO) is among small scale projects supported by CRDB Bank Plc. This project is located in Mbinga district, Southern highlands of Tanzania and supplies 0.5 Megawatts power to neighboring villages and excess to Tanzania Electricity Supply Company (TANESCO) mainly supply for Mbinga Township.
The total project cost is USD 3.045 Million out of which, the bank financed USD 1.6 Million. This is among of the small hydroelectricity power project which is an output of the programme initiated by the Government of Tanzania in collaboration with the World Bank to provide off grid electricity to the surrounding community. The excess electricity supply is sold to the Tanzania Electricity Supply Company to supply off grid power supply mainly coming from Heavy Fuel Oils (HFO) generators. The project has enabled connection to about 1,200 families which has been relieved from use of fire wood as the main source of power for domestic use. The community including surrounding primary and secondary schools, dispensaries, district prison and other economic activity groups are now accessing electricity as a major source of power supply.
Andoya power plant in Mbinga, Songea