BSoSGCI is a women- led faith-based organization situated in Njombe District, Njombe Region in the Southern Highlands of Tanzania. This is a rural mountainous zone, difficult-to-reach, with low grid connectivity since grid extension to these parts of rural villages is not only technically difficult but also costly considering the state’s limited budgets. As a result, BSoSGCI has since 1980, own and operates 160Kw off-grid micro hydro along the upper streams of Lupali river for both productive (lighting neighboring communities) and consumptive (own) uses. The convent with about 400 sisters, manages social and economic projects such as a boarding secondary schools, dispensary, orphanage centre, printing shop, mechanical & furniture workshop etc. which requires a sizable amount of electricity.

The increase in economic and social activities for both the Convent and surrounding communities has over two decades resulted into relative decrease in amount of KWh available and therefore forcing rationing and inability to connect new customers. The alternative sources such as diesel generator is relatively expensive both in investment and running costs. Due to this unmet demand for energy; BSoSGCI tapped the opportunity, scaled up and conceive, now under construction, a new 317Kw extension phase on the same river at Boimanda village. Apart from own use, the generated electricity will be supplied to households, small enterprises, and institution in the four (4) neighboring villages of Boimanda, Miva, Kitulila and Matola. Given the potential commercial viability and transformative impacts of the project, UNCDF, the Rural Energy Agency (REA) and other stakeholders partnered up with BSoSGCI to implement this initiative.

This investment is being featured by Stella Lyatuu , Municipal investment officer in Tanzania .As an important actor of this project, she answered the following questions:

• What made you enthusiastic about this investment?

The Lupali off-grid electrification initiatives was conceived in late 1960’s and in 1967 they constructed and start operating 160-KW off-grid plant. This initiative which is now being expanded had unique appreciation from the government of Tanzania the result of which it was launched in 1980 by the Father of the Nation and the First President of Tanzania, late JK Nyerere. The second enthusiasm comes from the owner-developer-operator and manager which is 100% women catholic sisters. BSoSGCI contributes to transforming the lives of the rural population who will finally be able to light their homes. The most touching are the impact which has been caused or triggered including education (schools) health (hospital) manufacturing, value additions and improvement of product shelve live (for perishables), women economic empowerment and overall employment.

• What were the challenges faced by this project?

a) The current 160Kw power plant could not meet the growing energy demand from increase in economic and social activities for both the Convent and surrounding communities, resulted to a forcing rationing and inability to connect new customers.

b) The project could not access commercial debt capital for project expansion due to lenders unfavorable terms (short tenure, high interest rate) and failure to meet minimum requirements (i.e., the required size of owners’ equity and collateral). Renewable energy projects generally have a high capital cost, and typical financing instruments available on the Tanzanian market are not well-suited to the development of renewable energy projects, which require low cost, long-term debt.

• What are the lessons learned from this example?

• Small investment can unlock and trigger huge impact not only on income but on human development
• Strategic partnership between development partners, and a combination of public and private sector finance is crucial in addressing the current struggle of private developers to access financing for capital investment
• There are similar potential areas in Tanzania that have necessary resources i.e. waterfalls and land formation which can learn and replicate in their areas.
• Faith Based, CBOs and similar social enterprises should be empowered as they play a critical role in contributing to various government policies and accelerate local development. BSoSGCI is supplying power to an area unreached by national grid lines.

About Stella Lyatuu:

Prior to joining UNCDF, Stella worked for the Ministry of Local Governments as a Senior Financial Management officer, in the areas of LGAs finance, fiscal decentralization, financial analysis, project finance and Public Private Partnerships (PPPs).

She has extensive experience of supporting public sector investments including the structuring of commercial infrastructure investments.

Contact:

Stella.Lyatuu@uncdf.org