Tanzania's plans to increase electricity connections in rural areas have been boosted by a $470-million loan that the East African country has secured from a consortium of development partners.

The country has made efforts

to tackle abject poverty in rural Tanzania, where electricity access has remained a pipe dream for the majority, but the loan – from the World Bank, the Norwegian, Swedish and UK governments, the European Union (EU) and the African Development Bank (AfDB) – paves the way for the implementation of the Rural Electricity Expansion Programme, expected to help lift many people out of poverty.

Of the total amount of $470-million, the World Bank will be providing $200-mmilion, while Norway has committed $80-million, Sweden $70-million, the EU $50-million, the UK $42-million and the AfDB $25-million. The Tanzania government has set aside $400 000 for the project in the current Budget.

“The funds that we have secured will supplement government's initiatives aimed at making sure that all households in the rural areas get electricity, which will help improve their socioeconomic situation,” says Tanzania Energy Minister Sospeter Muhongo.

Under the programme, Tanzania will connect some 2.5-million poor households in rural areas to the national electricity grid over the next five years.

In addition to household beneficiaries, the project will also benefit 25 000 education facilities, 25 000 health facilities and 150 000 businesses.

According to World Bank country director for Tanzania Bella Bird, the programme is important for Tanzania’s development agenda because it offers the opportunity for many more Tanzanians to have access to power in their homes and businesses.

“Access to electricity is critical to extend economic opportunities and reduce poverty,” she says.

The loan comes at a time when Tanzania is implementing a national energy policy whose goal is to increase the country’s overall electricity connectivity to 50% by 2025 and to at least 75% by 2033. Currently, only 36% of Tanzanians have access to the national electricity grid.

To achieve the goal of 50% connectivity, the East African country intends investing $1.9-billion in energy projects each year, with the primary objective being to boost installed electricity generation capacity from the current 1 500 MW to 10 000 MW.

The country is investing in natural-gas- and coal-powered plants in an effort to reduce dependence on hydroelectricity.