Achieving development goals with renewable energy: the case of Tanzania

Tanzania has implemented the Small Power Projects (SPP) programme to scale up decentralized renewable energy and reduce dependence on drought-prone hydropower and expensive fossil fuels. The programme uses an avoided-cost-based feed-in tariff (FIT) to attract private investment without increasing costs for the national utility, TANESCO. While five plants (28.3 MW) are operational and ten more are planned, growth is hindered by low tariffs, high financing costs, and technical skepticism. The brief highlights the importance of South-South exchanges with Thailand and Sri Lanka in developing the regulatory framework and suggests that transitioning to technology-based tariffs, supported by international climate finance, is necessary for broader deployment of solar and wind energy.

• Tanzania faces severe energy insecurity due to a heavy reliance on hydropower, which is vulnerable to climate-induced droughts. This led to power crises in 2006, 2007, 2009, and 2011, with the 2011 crisis causing rolling blackouts of up to 12 hours and forcing approximately 50 factories to close.
• The Small Power Projects (SPP) programme, launched in 2009, allows renewable energy facilities up to 10 MW to connect to the grid and receive a fixed pre-defined tariff. Unlike many feed-in tariffs (FITs) that are based on technology-specific costs, Tanzania's FIT is based on the 'avoided cost'—the cost the utility would have incurred using conventional sources—to ensure the programme does not create additional costs for the utility or consumers.
• The SPP programme has achieved initial success with five operational renewable power plants totaling 28.3 MW, utilizing wood waste, coconut husks, micro-hydropower, and bagasse. Ten additional projects exceeding 60 MW are currently in the pipeline.
• Implementation is constrained by three primary barriers: skepticism among utility engineers and practitioners, complicated regulatory requirements regarding land and water rights, and difficult financing conditions characterized by high interest rates and high equity requirements of around 40% of project costs.
• South-South cooperation was critical to the programme's design; study tours to Thailand and Sri Lanka in 2009 and 2010 helped Tanzanian officials develop appropriate regulations and establish the SPP cell within TANESCO.
• The current avoided-cost tariff is too low to attract investment in more expensive technologies like solar and wind, meaning only large companies with free waste biomass can currently develop viable projects. The document argues that transitioning to technology-based tariffs, likely requiring international climate finance, is necessary for a more diverse energy mix.

APA

Weischer, L. (2012). Achieving development goals with renewable energy: the case of Tanzania. Climate and Development Knowledge Network. http://cdkn.org/wp-content/uploads/2012/05/Tanzania-Power-InsideStory_6pp_final_low-res1.pdf

Chicago

Weischer, Lutz. Achieving development goals with renewable energy: the case of Tanzania. Climate and Development Knowledge Network, 2012. http://cdkn.org/wp-content/uploads/2012/05/Tanzania-Power-InsideStory_6pp_final_low-res1.pdf.

Wikipedia

{{cite report |last1=Weischer |first1=Lutz |title=Achieving development goals with renewable energy: the case of Tanzania |publisher=Climate and Development Knowledge Network |date=April 2012 |url=http://cdkn.org/wp-content/uploads/2012/05/Tanzania-Power-InsideStory_6pp_final_low-res1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{weischer2012achieving, author = {Weischer, Lutz}, title = {{Achieving development goals with renewable energy: the case of Tanzania}}, institution = {Climate and Development Knowledge Network}, year = {2012}, month = apr, url = {http://cdkn.org/wp-content/uploads/2012/05/Tanzania-Power-InsideStory_6pp_final_low-res1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }