Finance

BII to provide $15 million to install new hydropower and wind in Tanzania

BII to provide $15 million to install new hydropower and wind in Tanzania

British International Investment (BII) signed an agreement to provide $15 million with the potential to increase to $25 million to renewable energy platform Rift Valley Energy (RVE) to support part of RVE’s investment and development plan for future renewable energy projects in Tanzania.

BII is the UK’s development finance institution (DFI) and impact investor. The DFI’s support will contribute to the financing and installation of new hydropower and wind capacity – increasing the national grid’s supply of sustainable and affordable electricity to businesses and communities in low-income areas in rural Tanzania. The projects will sit alongside RVE’s existing run-of-river hydros, as well as the only operational wind farm in Tanzania – Mwenga Wind.

RVE, a Tanzania-based renewable energy infrastructure development company, is wholly owned by Meridiam, an independent investment Benefit Corporation and asset manager that specializes in the development, financing and long-term management of sustainable public infrastructure.

RVE owns, operates and is developing a portfolio of 30 MW of renewable energy generation alongside its subsidiary Mwenga Power Services, which operates two rural distribution networks (460 km long). All of these are located in the Southern Highlands of Tanzania. Beyond RVE, Meridiam recently invested in 100 MW of wind assets in Kenya. BII has partnered with Meridiam over several years, investing in past and current funds, which have developed major greenfield and brownfield infrastructure projects in Africa.

With the financing from BII, RVE is expected to support an additional 7.6 MW of new renewable energy assets, which will provide power to about 170,000 people and connect 4,000 businesses and households to the grid. The provision of clean and affordable power to local industries including factories that process tea, veneer, timber and water and pole treatment plants is expected to create 1,800 jobs.

The national electrification rate in Tanzania is 37% and as low as 24% in rural areas. “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 BII’s Chief Executive Officer Nick O’Donohoe. “This agreement with Meridiam to support Rift Valley Energy 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.”