Establishing Local Power Markets and Enabling Financial Access to Solar Photovoltaic Technologies: Experiences in Rural Tanzania

Abstract

AbstractEnergy inclusion is a major concern in Tanzania, where rural areas are widely lacking access to both power networks and off-grid systems. Different barriers are slowing the achievement of Sustainable Development Goal 7: universal electrification in the country raises concerns in delays and equity. Financial exclusion adds to the complexity of adopting appropriate technological solutions, particularly for rural communities. Solar photovoltaic solutions represent an opportunity to increase energy access and enable growth. The introduction of new technological products requires to establish local power markets, including demand, financial resources and providers, supply mechanisms and after-sale services. The financing of renewable energy solutions for rural households partially relies on microfinance institutions and community financial groups. Technology suppliers are also providing financial services to expand access to solar and photovoltaic products, applying models mostly enabled by mobile payment systems. The paper assesses the effects of an initiative implemented in Malinyi and Kilombero districts to support the establishment of local solar power markets. The involvement of Village Community Banks to engage communities and develop sustainable financial schemes is evaluated, together with the complexity of combining awareness raising on technological solutions and financial education. Results of the implementation are presented and discussed evaluating the different ingredients of the established markets.