Dar es Salaam. Renewable energy stakeholders said the challenge of accessing finance hampers the delivery of renewable energy technologies to off-grid communities for development activities, especially in agriculture.
According to them, solar energy is not only intended to light up homes, rather it is used in businesses and helps to improve agricultural activities.
They said there is a need for financial institutions to come up with proper plans that will help elevate the rapidly growing sector.
“In this solar energy business, there are many challenges, but the main one is public awareness, which makes it almost impossible for financial institutions to lend, fearful,” said the managing director of Fraxen Consult Ltd. , Francis Rwebogora.
He was speaking at the meeting on unlocking renewable energy finance for the productive use of off-grid renewable communities, organized by his company and the Tanzanian Renewable Energy Association (Tarea).
According to him, there is a huge demand for solar energy for off-grid communities, but it is not accessible due to distance and cost. “If financial institutions allow more liquidity to solar companies, these communities’ access to electricity will increase,” he said.
Speaking at the meeting, CRDB green finance specialist, Mr. Hailo Kibiki admitted that they currently do not have any specific products for renewable energy. Although the bank lends to large and medium-sized enterprises. He said they still see it as a risk area, but will try to explore the possibilities.
“We are ready to lend, but we need more dialogue with stakeholders to see the best way, this industry is growing fast and has promise, we are also seeing the positive impact, especially for off-grid communities, how they run their business using solar energy,” he said.
On the other hand, Tarea Deputy Executive Secretary Emma Laswai said that the world is currently promoting the use of renewable energy to help reduce impacts on climate change. “Indeed, there is a need for financial empowerment so that services can reach many people, especially in rural areas,” she said.
She added: “The meeting was a long-standing wish of our stakeholders to bring them together with financial institutions, especially banks, so that they can bargain collectively and today we received a word of comfort as the banks have said they can lend us but more talks are needed.
Ms Laswai said there was a huge divide between stakeholders and banks.
“We couldn’t meet and mention the challenges and opportunities that exist in the sector and let go of the idea that solar energy is only for light.”
Other partners in this project include Don Bosco TVET, IMED Foundation, TAMFI,
Elico Foundation, KAKUTE Projects, TAREA and the project is funded by CS
Mott Foundation of Flint Michigan. The objective of this project is to develop the
renewable energy ecosystem in Tanzania.
With 65.3% of rural households having access to electricity (Energypedia, 2020)
there seems to be specific potential for solar solutions in these areas. Past
Awareness campaigns by the government and NGOs have contributed to
knowledge and understanding of sunscreen products among consumers. The decision by
the Tanzanian government will abolish VAT and the East African Community will abolish customs duties
on the principle of solar products has made the solar market very interesting for
entrepreneurs and many commercial organizations and institutions specializing in solar energy
products started their activities in recent years