Dar es Salaam, 27th June, 2023
As Tanzania strives to achieve its ambitious renewable energy targets by 2025, the Tanzania Association of Microfinance Institutions (TAMFI) is pleased to report a positive response from financial institutions in supporting grassroots renewable energy financing. This development represents a significant milestone towards realizing the country’s renewable energy goals.
Tanzania’s President, Dr. Samia Suluhu Hassan, has set a target of generating 6,000MW of electricity from renewable sources by 2025. Recognizing the need for collaborative efforts, including active participation from financial institutions, TAMFI CEO Winnie Terry expressed satisfaction with the encouraging response received from several Tanzanian financial institutions regarding renewable energy financing for end-users.
TAMFI, a not-for-profit umbrella organization representing microfinance institutions in Tanzania, has been diligently promoting decentralized renewable energy (DRE) financing across the country. Their persistent efforts are now yielding positive outcomes.
Winnie Terry, CEO of TAMFI, remains optimistic about the future and is delighted to witness several TAMFI members providing loans to end-users for renewable energy projects. The C.S. Mott Foundation, dedicated to building an inclusive financial ecosystem for enterprises and end-users in Tanzania, has played a pivotal role in making this possible through its support of TAMFI’s project.
Terry emphasized, “Access to finance is a game-changer for Tanzania’s renewable energy sector. I am thrilled to see that some microfinance institutions are already financing renewable energy projects for end-users. I strongly believe that financing renewable energy will soon become a standard practice for financial institutions throughout Tanzania.”
TAMFI has been implementing the Energy Access: Building an Innovative Financial Ecosystem for Enterprises and End Users project, consisting of multiple phases. This project has raised awareness about the importance of renewable energy financing among financial institutions, with the expectation of positively impacting Tanzania’s economic development, poverty reduction, and environmental sustainability. Notable financial institutions under TAMFI, such as Enokwe Finance Ltd, Samekaya SACCOS, Vision Fund Microfinance Bank, Maendeleo Bank, BRAC Tanzania Finance Ltd, Tujijenge Microfinance Ltd, Engishon Microfinance Ltd, and HP Finance, have already commenced offering renewable energy products and services.
“We are highly encouraged by the proactive steps taken by some financial institutions in Tanzania towards financing renewable energy. By extending loans to end-users, these institutions are significantly advancing the mainstreaming of renewable energy financing. We eagerly anticipate more institutions joining this progressive trend. Such initiatives are crucial in our pursuit of universal access to sustainable, clean, affordable, and reliable electricity in Tanzania,” highlighted Terry.
The C.S. Mott Foundation has actively supported TAMFI’s endeavors to enhance access to renewable energy in Tanzania. TAMFI continues to collaborate with development partners and stakeholders to promote the adoption of DRE financing and address the challenges hindering progress towards achieving universal access to sustainable, clean, affordable, and reliable electricity in the country. TAMFI believes that the growth of renewable energy financing in Tanzania will contribute to the achievement of Sustainable Development Goal (SDG) 7, aiming for universal access to electricity by 2030. The organization remains dedicated to fostering the expansion of the renewable energy sector in Tanzania, thereby creating an equitable energy system where reliable and sustainable energy sources are accessible to all.
Tanzania, like many other Sub-Saharan African countries, faces the challenge of providing sustainable, affordable, and reliable electricity to its population. Reports from the International Energy Agency (IEA), International Renewable Energy Agency (IRENA), United Nations Statistics Division (UNSD), and the World Bank indicate that over 570 million people in sub-Saharan Africa lack access to electricity.
In Tanzania, a significant portion of the rural population remains without electricity, and numerous households are located beyond the reach of the power grid. TAMFI firmly believes in the potential of renewable energy technologies, including solar, wind, and geothermal energy, as drivers of productive energy and lighting solutions, as well as for irrigation farming in agricultural development.
TAMFI asserts that embracing these energy-efficient and renewable technologies goes beyond meeting energy demands; it represents a substantial step towards reducing environmental impact, lowering carbon emissions, and contributing to a healthier, greener planet. The organization firmly believes that the time is ripe for transitioning to sustainable, reliable, and economically viable renewable energy solutions, and it is fully committed to facilitating this transition in Tanzania.
Renewable energy plays a critical role in ensuring universal access to sustainable, clean, affordable, and reliable electricity in Tanzania. While the government and development partners have made significant strides in promoting renewable energy adoption in the country, there is still much work to be done in terms of raising awareness and educating communities and financial institutions about the benefits of renewable energy.
As part of its initiatives to promote renewable energy financing, TAMFI has conducted training and capacity-building workshops, renewable energy field tours, roundtable discussions with stakeholders and policymakers, and linkage meetings for financial institutions in Tanzania. These interventions focus on equipping financial institutions with the necessary knowledge and skills to finance renewable energy projects. The training sessions cover various aspects, including product development, marketing strategies, risk assessment, credit analysis, loan structuring, and risk management. Additionally, TAMFI has provided technical assistance and support to financial institutions in developing financing products tailored to the specific needs of renewable energy projects.
Richard Nyamonge, Managing Director of Enokwe Finance Limited, expressed his institution’s commitment to financing renewable energy projects, stating, “As a financial institution, we bear the responsibility of endorsing sustainable practices. Financing renewable energy projects is one way we fulfill this responsibility. We take immense pride in contributing to the progress towards a more ecologically responsible and sustainable future for Tanzania.”
About TAMFI: Established in 2001, TAMFI is a not-for-profit umbrella organization representing microfinance institutions in Tanzania. It offers capacity-building programs, engages in advocacy roles, and provides a networking platform for its members. TAMFI’s membership includes deposit-taking institutions involved in microfinance (commercial, community, and microfinance banks), non-deposit-taking MFIs (credit-only), SACCOS, apex community microfinance groups (CMGs), micro-insurance companies, business development service providers, and NGOs. The association aims to enhance the capabilities of microfinance institutions and the microfinance sector as a whole through advocacy, research and development, responsible and sustainable microfinance, capacity building, and information dissemination to its members and stakeholders, including the government.
TAMFI has over 150 members, impacting approximately 2 million micro-entrepreneurs and communities in both urban and rural areas of Tanzania. Its strategic direction involves becoming a dynamic network that supports the microfinance industry in Tanzania and advocates for a favorable legal and regulatory framework for microfinance institutions.