Published on February 11th, 2015 | by Jake Richardson0
Tanzanian Solar Company Receives $7 Million Investment
February 11th, 2015 by Jake Richardson
Originally published on Solar Love.
International Finance Corporation is providing a $4.5 million loan to a solar leasing company in Tanzania called Off Grid Electric for the expansion of solar power. IFC is a member of the World Bank Group. A $2.5 million loan from Cordiant Capital of Montreal, Canada was also included, which brought the total amount of the investment to 7 million dollars. Off Grid Electric wants to add 200,000 households in Tanzania to its solar customer base.
Tanzania is not a wealthy country currently, but investing in clean, renewable energy can provide immediate benefits to residents such as access to affordable electricity. For example, Off Grid Electric provides new customers with solar panels, lights, lithium batteries and an electricity meter for an installation fee of $6-10. Almost 35,000 of the home solar systems have been distributed so far. Its home solar systems can be operated by mobile phone.
Solar Power is Healthier Than Kerosene
Kerosene is one of the main fuels used in Tanzania for lamps and backup generators. According to one source, eight million people in the Lake District of Tanzania use it.
However, kerosene lamps can cause deadly fires and severe injuries. People who use these lamps might spend as much as 10%-15% of their annual income on lighting, but can solar power can be cheaper. Kerosene is made from crude oil, and we all know its cost can fluctuate markedly. Home solar systems are decreasing in price gradually and this trend has been steady over a number of years.
Also, Off Grid Electric allows its customers to make small, regular payments so they can afford a home solar system.
It has been reported that some solar retailers there mark up their solar products too much, “Current barriers to increased growth in the sector include cost, financing and quality. Although there is a far-reaching network of solar technology retailers throughout the country, these dealers frequently apply large margins on the systems that they sell in order to compensate for relatively small sales volumes. It is not rare for a retailer to mark-up the cost of solar equipment by 50% or more above wholesale prices.”
Home solar is a very good solution in Tanzania because 80% or more of Tanzanians are not connected to the grid. Also, less than 5% of rural areas are electrified, so a home solar system can be an excellent solution.
Hydropower and natural gas provide the bulk of Tanzania’s electricity currently.
“As developing countries move to a greener, low-carbon growth paths, the private sector will play a critical role in expanding access to energy. IFC supports as the innovation of Off Grid Electric, which provides low-cost, clean energy solutions to the millions of people in Africa not connected to the grid,” explained Oumar Seydi, IFC Director for Eastern and Southern Africa.
Image Credit: Charles Asik, Wiki Commons