Energy is a key driver of development in Tanzania, particularly in relation to promoting
the growth of small and large scale economic activity in the private sector. Renewable
energy is currently growing fast in Tanzania (IEA, 2011) and Tanzanian markets could be
supported to benefit from recent improvements in technology associated with falling
costs and new business models.
Tanzania has abundant renewable energy resources in terms of hydro, sunlight, wind,
waves, geo-thermal sources and bio-mass. Only hydro is currently being exploited in a
renewable manner, and there is a great deal of room for improvements in efficiency and
sustainability in all areas.
Another assumption underlying this study is that the technology needed to develop these
resources is available and that what is constraining development are variables that spring
from inadequate marketing systems. There is a widespread lack of knowledge about the
potential of renewable energy all along the value chain. A consequence of this is that
optimal financial, infrastructural and institutional frameworks to support the development
of renewable energy are not in place.
The purpose of this study, then, is to map out the current status of each renewable energy
market system in Tanzania, looking at on-going initiatives and potential future demand
and supply in order to recommend possible entry points for Sida and DfID over a five
year horizon. Mapping the different renewable energy sources includes an analysis of
their role in the context of the overall energy sector and development priorities in
Tanzania; particularly those which are compatible with M4P (Making Markets Work for
the Poor) approaches. Energy efficiency measures are discussed in chapter four.
Although these are not always directly related to renewable energy markets, they are
important in attaining the goal of sustainable energy for all. Finally, an overview is
presented of the systemic issues that need to be addressed to ensure further can market
penetration by emerging renewables.
The scope of this study is to provide an overview, analysis and recommendations to Sida
and DfID regarding technologies and modalities for supporting the development of
renewable energy.
Any study with a limited budget with a scope as wide as this will have limitations. It is
not practically possible to evaluate all companies in a sector, or to claim to understand all
available tools for funding. The goal has been to identify the market sectors with the most
potential and to give examples of how these sectors could become more sustainable.