The funding by the UK’s development finance institution and impact investor will boost the national grid’s supply of sustainable and affordable electricity in low-income areas in rural Tanzania.
British International Investment (BII) has signed an agreement to provide $15m (€14m), with an option to increase this to $25m, to Rift Valley Energy (RVE), a Tanzanian renewable energy platform.
RVE was bought last year by Meridiam, an asset manager specialising in the development, financing, and long-term management of sustainable public infrastructure.
“Millions of people in Tanzania do not have access to energy and this greatly impacts on their ability to access essential services and opportunities,” said Nick O’Donohoe, BII’s CEO.
The deal with Meridiam “will improve the lives of thousands of people in rural Tanzania as the energy it will provide will empower many sectors which will help to enhance educational opportunities, healthcare services, job creation and industrial productivity”, O’Donohoe said.
Powering 170,000 people a year
Around 37% of Tanzania has access to electricity, dipping to as low as 24% in rural areas. With the funding from BII, RVE expects to provide energy to about 170,000 people per year and connect 4,000 businesses and households to the grid for the first time.
The emergence of clean and cheap power may generate 1,800 jobs in local industries, including those that process tea, veneer, timber and water.
Mathieu Peller, deputy CEO of Meridiam, said the commitment by BII “affirms our confidence in Tanzania as a market, where the government has clear and ambitious economic development plans which we look forward to supporting through sustainable investment.”
BII has a long track record of investing in East Africa , with a portfolio that is worth around $1.4bn. Last year, BII invested more than $355m in sectors including clean energy, infrastructure, telecoms, and financial services.
