Ludewa district rural electrification programme - mini hydropower

Fondazione ACRA Tanzania

Ludewa District Rural Electrification Programme

(mini hydro-power)

Projects:• Mawengi – LUMAMA

Total power:300 kW 8 villages connected ~1,700 customer Isolated mini grid

• Lugarawa HP

Total power: 1850 kW 20 villages connected ~7,000 customer Grid connected

Projects location

• Electricity is innovation: people want electricity but can’t “see” and know the opportunity for socio-economic development

• Multi-stakeholders participation: communities, district and village authorities, NGOs, private sector, academy

• Participatory decision making and planning

• Use an integrated approach, breaking the walls among sectors: Resources optimization Value chain development Synergies: Energy for

Agriculture Production Transformation Commerce

Basically: creating more with less

Approach

COMMUNITIES COMMITMENT IS A KEY FACTOR IN SUCCESS OF ANY PROJECT

• Ownership of the power plant through a community based social enterprise: consumers are members (LUMAMA)

• Consumers association as a shareholder together with other stakeholders (Lugarawa)

• Split ownership between energy production, transmission and distribution: – Production entails big investments and is interesting for private investors– Communities could own or participateto distribution networks (senseof ownership, strength sustainability)

COMMUNITY INVOLVMENT MODELS

NEW BUSINESS MODELS

New business development – market creation

- Grant for adoption of electrical equipment for processing

- Technical and managerial training

- Selection of a number of enterprises (i.e.: carpentries, oil and flour producer, welding, fruit processing, tailoring, etc.)

ELECTRICITY IS AN ESSENTIAL ASPECT IN BUSINESS OPPORTUNITY CREATION, BUT NOT SELF-SUFFICIENT

establishment ofdemonstration plots for

Sustainable and profitable production

collect market information;supply chain analysis of

opportunities

FINANCING:• Upfront costs: Feasibility studies, environmental impact assessments

and bureaucratic procedures can affect heavily the investments• Need of subsidies for off-grid projects and for grid extension.• Mini-grids as an alternative

CUSTOMERS:• Tariff structure: Develop an appropriate and affordable tariff structure

and lowering connection costs next to zero• Developing “pay as you go” systems (pre-payment meters): to allows

consumers to better regulate consumption and to utility to get 100% bill recovery

• Customer Creation: needs of budget (or collaboration) to build PUE• Villages in the catchment have to be connected to the grid

Isolated mini-grid can be profitable though low profits to be expected

Lessons Learnt On:

ENVIRONMENTAL (HYDRO-POWER):• Need of financial resources for environmental conservation and

sustainable management of natural resources

SOCIAL:• Emphasis on participation into decision making processes and

governance of the service;• High involvement of local authorities (village, district) TECHNICAL:• Stress on strengthening capacities of national staff (technical,

managerial)

Private Investments are available but a friendly environment must be created

Lessons learnt oOn:

When there is no energy,

there is no colour, no shape, no life.(Caravaggio)

Eng. Davide CerettiEnergy Program Manager – Tanzania

+255.766.752.372 +39.335 64.69.488

skype: davide.cerettidavideceretti@blu.it