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BAHI, June 29, 2022¡ªThe bumpy dirt road that runs towards the hamlet of Nholi from Mzogole village emerges and disappears in turns, through dried-out seasonal swamps, and patchy, sometimes dense, tree cover or shrubbery. Eventually, the hamlet spreads out boldly, a mix of permanent houses and shacks, with new, shiny colored iron roofs and dusty streets. The narrow main street is lined with bars, hair salons, barbershops and restaurants, each booming choice music out of their stereos, against the defiant sounds of generator- or electricity-powered stone crashers at the far end of the street.

Not long ago, this same street in rural Tanzania was dotted with just a few small businesses struggling to make ends meet. Access to electricity was low, making it difficult for businesses to keep long hours, and energy prices were too high to stay afloat.

Electricity is critical for reducing extreme poverty for both urban and rural populations and fostering opportunities for productive economic activities. While access improved in urban and peri-urban areas, the pace of rural electrification lags substantially behind the national average. The Tanzania Rural Electrification Expansion Program is helping to close this gap.  

Lighting the Way for Businesses

Mama Ali Pendo¡¯s restaurant sits directly across from a busy hair salon, where some of her customers have their hair done while dining on the food she has served them. Mama Ali, as she¡¯s known around the neighborhood, was one of the first arrivals in Nholi in 2016, after artisanal miners found new mineral concentrates in these hills of Bahi district, and turned Nholi into a mining hub.

¡°Food business can be very lucrative in a mining area, because miners must eat and most of them don¡¯t have their own gardens,¡± said Mama Ali, a married mother of four.

With no electricity supply to the area, Mama Ali and other business owners who could afford it used diesel-powered generators. Mama Ali paid her generator service provider Sh1,000 ($0.45) per day to light a single bulb every evening and Sh3,000 ($1.30) for her fridge.

¡°I was spending up to Sh130,000 [$56] per month for the generator, but in addition I was buying inputs like food and charcoal, paying my staff, and also paying rent,¡± she said. ¡°It was tough, but we were all surviving the same way.¡±

As soon as grid electricity arrived in Nholi in January of 2021, Mama Ali connected her building which she now owns and from which she operates. ¡°Having electricity has helped a lot; my monthly bill averages about Sh6,000 [$2.60],¡± she said.  

With an estimated 4,000 residents, Nholi¡ªtogether with neighboring Mzogole village¡ªrecently joined the ranks of nearly 4,300 newly-electrified villages in the country as part of the implementation of the $209 million . Approved in 2016, TREEP is financed jointly by the government of Tanzania, the International Development Association (Å·ÃÀÈÕb´óƬ), and the , and implemented by the Rural Energy Agency (REA) and  the Ministry of Energy.

TREEP is designed as a Program for Results (PforR), supporting the government¡¯s National Rural Electrification Program (NREP) by innovatively linking the disbursement of funds directly to the delivery of defined results and achieve its objectives, which include:

• Expanding rural access to electricity
• Increasing the supply of renewable electricity in rural areas
• Strengthening the capacity of sector institutions to deliver on the NREP

Building on Progress

With TREEP, this is the first time the World Bank is using the PforR financing instrument for the rural electrification sector and in the energy sector in the Africa region. The PforR was considered the most appropriate approach to streamline and accelerate electrification as it allows for a strong focus on achieving tangible results to increase electricity access and scale up renewable electricity generation. It also crowds in additional support to the NREP and the government¡¯s access agenda from other development partners and the private sector.

Over the past decade, electricity access in Tanzania increased from 7% in 2011 to 37.7% in 2020, one of the fastest access expansion rates in Sub-Saharan Africa. This rapid increase in access has been attributed to several factors, including a strong political commitment and support for the rural electrification expansion programs, the introduction of a petroleum levy to finance the NREP; and reductions in connection fees and service charges that were first introduced in 2013.

Despite this progress, a large gap remains between electricity access rates in urban areas (73.2%) and rural areas (24.5%), and between grid coverage (78.4%) and the overall access or connectivity rate (37.7%). The government is committed to further accelerating access to modern energy services and has set a target to achieve universal access to modern energy services by 2030, of which 75% will be electrified through national and mini-grids and the remaining 25% through quality verified off-grid solutions.

Now in its sixth year of implementation, TREEP has contributed toward this goal through grid extension, as well as with more than 900,000 connections, providing over 4.5 million people with access to electricity. This achievement exceeds the program¡¯s initial target of 500,000 connections (or 2.5 million citizens) by end of the program. Among these new connections are 1,664 healthcare facilities and 5,900 education facilities. 

To meet the country¡¯s national and international climate change goals and mitigate climate change risks, the program also supports the government strategy to diversify the energy mix through enhancing the use of renewable energy resources. The program is funding a credit line for small power producers (SPP) and renewable energy companies (REC), which had its first loan approved and disbursed in February 2022 for the Ijangala Hydro Project with an expected capacity of 0.36 MW and the project construction is currently underway. In addition to a strong SPP pipeline with several SPP projects currently being evaluated, these projects will together contribute a total 13MW renewable energy capacity which will benefit at least 100,000 people. 

Qang¡¯dend Secondary School, in Mang¡¯ola ward in remote Karatu district is one of the schools that have recently gained access to electricity. Yonas Joseph, who has taught biology and geography at the school since 2013, recalled how they were often frustrated with the high budget for photocopying and printing past test papers that would have helped to prepare their students for national exams.

¡°We could not test them as regularly as we wanted because of lack of access to printing and photocopying and we couldn¡¯t afford procuring these services externally, so the students¡¯ performance was quite poor,¡± he said. ¡°Back then, the kind of video-supported learning we are engaging in now was like a dream. Water was a challenge, even repairing the students¡¯ metal-framed furniture was problematic because it all requires electricity.¡±

In addition to the school¡¯s remoteness, the lack of electricity was also a threat to teachers¡¯ recruitment. ¡°We had this experience where three newly appointed teachers chose not to return after their preliminary visit to the school,¡± Joseph said. ¡°Young teachers tend to have laptops and smartphones, and they realized they couldn¡¯t use these here, so they left.¡±

Once they saw electricity infrastructure going up, the school authorities quickly followed up with the district¡¯s Rural Energy Agency office. ¡°We were very excited, we wanted to make sure we were on top of the list, and we were,¡± said Joseph.

The community-owned school, located more than 150 kilometers (90 miles) from the northern town of Arusha, was built in 2008 and has 342 students, with 192 girls. In 2018¡ªafter gaining access to electricity¡ªthe school launched their long-planned hostel facilities, specifically for Form Two and Form Four female students, so they would have extra time in the evenings to prepare for the national assessments which are typically scheduled at the end of each calendar year. They later also added a hostel for boys.

¡°Our performance in the national exams has gradually improved every year over the past three years since we got electricity, and in 2021, 97 out of 99 Form Four candidates achieved between grades one to four, none with grade zero at all,¡± Joseph said. ¡°We have our own printer and photocopier, and our teachers have their laptops. We also have access to water, which is pumped using electricity. The motivation is high among both the students and teachers.¡±

Tanzania is at an early stage of rural electrification and is taking an approach that includes both on-grid and off-grid solutions. Established in 2005, the Rural Energy Agency¡¯s (REA) mission is to promote and facilitate availability and access to modern energy services in rural mainland Tanzania. REA implements the country¡¯s National Rural Energy Program, which sets out the strategy for deployment of investments and focuses on electrifying settlements through three different approaches: by densification (i.e., the connection of new customers to the grid in already electrified settlements), by grid extension (adding new connections to the grid) and through off-grid investments (including mini-grids).

Scaling up access to modern forms of energy is a key component of the Tanzanian government¡¯s long-term economic growth plan, given the importance of electricity access for reducing extreme poverty and support human capital development, including improved healthcare, quality education and fostering opportunities for productive economic activities, including agriculture.

¡°Apart from focusing on households, schools and health facilities as our critical beneficiaries, both TREEP and the NREP are aiming to directly benefit productive enterprises in order to support strong employment outcomes,¡± said Advera Mwijage, the Director of Market Development and Technologies at REA. ¡°This is important because improved reliability of the electricity supply and access to the grid contributes to the increased productivity and incomes of productive enterprises to reduce their dependency on diesel generation which is expensive compared to the cost of grid supply. In addition, increased supply reliability can boost productivity and reduce material losses.¡±

When the grid reached Miswi village in Ruvu district in mid-2020, the timing could not have been more opportune. As the pandemic took hold, it had become increasingly difficult for the Ruvu Fish Farm to maintain their supply of fish food which they imported from neighboring Zambia.

¡°We had to take the decision to stop stocking grow-out because the cost of importing food was high and still rising, and we didn¡¯t know when the pandemic effects would ease up, so we opted to deal in fingerlings only,¡± said Godlove Kassaka, the proprietor. ¡°Even then, the costs of running the farm were high because we used generators to pump water, in addition to other uses.¡±

Kassaka said they were spending up to Sh2.5 million ($1,080) per month to run the diesel generator to sustain operations. ¡°After stopping the grow-out business we had essentially closed one of our revenue streams, so the future didn¡¯t look hopeful for us,¡± he added. ¡°As soon as the grid arrived, we connected immediately, and we were relieved to see that our pumping costs alone immediately came down to just Sh1 million [$430] a month.¡±

The sprawling 14-acre farm located almost 80km (50 miles) outside of Dar es Salaam, the business capital, has 28 ponds and employs three aquaculture professionals in addition to 10 other staff. With access to electricity, the farm did not only manage to stay in operation, but the business also improved, and they are now selling upwards of 250,000 fingerlings a month (approx. Sh50 million, $22,000), compared to 100,000 (Sh20 million, $8,600) before they connected.

¡°Because of the cost of running the generators, we were not sustaining adequate aeration in the ponds, and this was affecting our production,¡± said Kassaka. ¡°With electricity, we are now planning to start making fish food locally within the year, so that we can supply our farm as well as others.¡±

Ahead of new community installations, REA conducts sensitization and awareness meetings targeting women and provides direct support with the associated application paperwork to ensure that female-headed households and businesses tap into the new electricity supply network. As a result, 3,242 female-owned businesses have been provided with electricity access under TREEP.

¡°Providing rural households, social institutions, and productive enterprises with new energy access and improved energy services can promote gender equality, create employment and business opportunities for women, and improve development outcomes with regard to, for example, education and maternal health,¡± said Jenny Hasselstein, World Bank Senior Energy Specialist and Task Team Leader of TREEP. ¡°Evidence shows that these benefits are often realized only if gender-sensitive approaches are integrated in the design and implementation of rural electrification interventions.¡±

Having experienced life in Mzogole without electricity, Sophia Mkuya, a mother of seven, seized the opportunity and connected her tailoring shop along the main street as soon as the infrastructure arrived. It has been a boon for her work.

¡°I have sufficient lighting, so I can work longer hours than when I used to rely on a lamp; and my products are of much better quality because I now press them with an efficient electric iron instead of a charcoal-powered iron,¡± she said.

In the past, Sophia spent Sh5,000 ($2.10) on a sack of charcoal which would last a month as she used it for both her home cooking and pressing clothes. With the electric iron which she bought for just Sh27,000 [approx. $11.70], she spends only up to Sh10,000 [$4.30] each month on electricity, against an average monthly income of approximately Sh150,000 [$65.20].

¡°When you are using charcoal, all the clothes have to be ready for pressing at that time, because it can be challenging to light up the iron especially when the charcoal is rained on or to reheat it when it cools,¡± she said. ¡°With the electric iron, I am able to regulate the heat, and I don¡¯t have to worry about stains or burn spots on the clothes, which happened a lot when I used charcoal.¡±

Some block/streets below/away from Sofia lives Penina Kihanda, 26. After completing her diploma in pharmacy at a university in Dar es Salaam, Penina, was certain of one thing: ¡°I didn¡¯t want to find myself moving around from one relative¡¯s house to another, staying around without any work to do,¡± she said.

A friend at the university put her in contact with a family member who offered her a job running a pharmacy in rural Mbabala in Bahi district, some 500 kilometers from Dar es Salaam. After working there two years, with the money she had saved, Penina decided to set up her own basic community drug shop and went scouting for a place. She found the ideal location in remote Mzogole village, nearly 25 kilometers farther away from Mbabala. The village had only recently benefited from grid connection in January 2021 when she moved there in March of the same year.

¡°At the top of my criteria for a location was access to electricity because I wanted to be able to use my phone and work on my laptop, and not to feel cut off from the world,¡± said Penina. ¡°Luckily, when I got here, I also found that the dispensary that one would consider as competition to my shop opens only till one p.m., while I am open long into the evening, attending to customers.¡±

In the time she has lived there, she has noticed more people moving to settle in Mzogole which, compared to neighboring Nholi, has a dispensary as well as a primary and secondary school, and is also more accessible even during the rains. Penina has bought land along the main street and plans to start building her own shop soon.

¡°I have customers here, and I¡¯m comfortable,¡± she said. ¡°I am able to warm food for my baby quickly, I can iron my clothes, work on my computer and I can listen to music. It is not a must that we all have live in Dar es Salaam or Dodoma.¡±