Deadline: 3 January 2020
The Rural Energy Agency (REA) is currently inviting renewable mini- and micro grid Project Developers to submit applications for result based grants to support accelerated access to sustainable energy services in un-served rural areas of mainland Tanzania.
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A Results Based Financing (RBF) approach will be used where capital grant incentives will be offered to Green Mini- and Micro-Grid (GMMG) service providers with realistic business plans, based on the verified number of electricity connections resulting from the financing support.
Objectives of Results Based Financing
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The overall objectives of the Programme are:
- Electricity access for at least 735,000 people (147,000 households), of which 430,000 (86,000 households) through green mini and micro grids;
- Accelerated access to high quality solar PV-systems to over 900,000 people (188,000 households) in more remote areas of Tanzania; and
- Increase of private sector investments in renewable off-grid and mini-grids by use of various financial instruments.
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The amount of the grant to be provided is variable, it is calculated based on the number and type of connections proposed as shown below:
- Main-grid connected GMG (Tier 5)
- RBF Grant per Connection ($ 600.00)
- Isolated GMGs (Tier 4)
- RBF Grant per Connection ($ 500.00)
The minimum amount per RBF Grant Agreement is USD 1,500 per project. The maximum amount is 75% of total investment cost for isolated grids and 75% of total investment in the distribution network for grid connected mini-grids per each project.
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The following categories of developers and investors are eligible for RBF within the Private Sector Renewable Energy Investment Window:
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- Any private enterprise, NGO, community, or co-operative operating in Tanzania, registered as a legal entity, and having the capacity to enter into a binding agreement under the laws of the United Republic of Tanzania is eligible, subject to REA assessment of technical, financial, management and procurement capacity to implement the proposed project according to the Operating Guidelines.
- Project developer shall provide evidence that they have satisfied EWURA’s regulatory requirements.
- For micro-grids: REA shall accredit participating companies for commercial and domestic micro-grid operation and service provision.
- Project developers seeking to secure debt financing from banks or other financiers must provide evidence of such bank’s or financier’s commitment to provide the debt financing for the project.
- The Project Developer shall not have been “blacklisted” by the Government of the United Republic of Tanzania or any other regional or international authority for any reason whatsoever; and
- The Project Developer shall not have been declared bankrupt and should not have a bad history of mediation, arbitration or litigation relating to fraudulent business transactions.
- A project developer who has received a grant under this initiative shall not be eligible for another grant until he has completed all the obligations of the previous grant.
- Project developers may only apply for grant support for one project. The project may, however, be comprised of sub-projects in different locations, if all the necessary information (including financial, technical, managerial, etc.) is provided for each sub-project in the project proposal.
The following eligibility criteria apply for RBF grant support under this second call:
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- Projects must be supplied by a renewable energy power generator not exceeding 10MW.
- Projects must aim to connect domestic (household), commercial and institutional customers. Projects with a high number of connections will receive preference.
- Existing GMMGs aiming to connect additional customers without investment in additional generation capacity: Must have connected at least 60% of their target under RBF first call (if applicable), and ensure that the SE4ALL Tier service level of the existing distribution network is not reduced as a result of the extension.
- New GMMGs not having reached financial close: Must provide evidence that proves a high probability of reaching financial closure.
- Selection of sites to be electrified in Tanzania’s islands specifically to Lake Victoria, Lake Tanganyika and along the Indian Ocean coast have high priority.
For more information, visit https://bit.ly/2qWPnpn