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Rural enterprises flourish in Tanzania after electrification


Energy 4 Impact is proud to have been recognised by the Embassy of Norway in Tanzania for its role in boosting rural enterprises through electrification. A recent Facebook post by the embassy Access to electricity sparks opportunities for entrepreneurship and business growth! detailed how the average profit for businesses supported within the cited project grew by 135%. The embassy also shared inspiring stories of how being able to use electrical appliances for the first time enabled rural enterprises to flourish.  

The beneficiaries took part in an innovative pilot project implemented between 2018 and 2019 in the Tanga and Pwani regions of Tanzania. Alongside Multiconsult AS, Energy 4 Impact supported Tanzania’s Rural Energy Agency and TANESCO to promote demand for electricity for business activities across 60 villages. The provision of business training helped a total of 349 entrepreneurs to capitalise on new power connections.

Since the completion of the project, recent figures show that the project comprised high value for money. According to data on employment creation, entrepreneur profits and increase in electricity consumption after the first year, the project created US$1.86 of value for every $1 spent. Tracked over the the longer-term, the economic value generated by the project will likely rise even higher.

The striking outcomes delivered by this project suggest there is now an opportunity to design and implement similar projects across Africa. Governments, energy agents, utilities, DFIs and local businesses all stand to benefit from electrification projects that enable them to expand their operations and services. Rural electrification plans currently being implemented across sub-Saharan Africa will connect tens of thousands of villages to the grid for the first time over the ten years.

If the impact of the Tanzanian pilot scheme is applicable to all those villages, the economic benefits are potentially huge: for every 100,000 villages, over 400,000 new jobs could be created and over $1 billion in extra annual profits could be generated for local enterprises. However, achieving such an impact will entail a dedicated and co-ordinated effort across the public and private sectors. It will take investment in hard assets such as electricity transmission and distribution infrastructure, standalone electricity generation facilities, equipment and appliances. However, it will also require the implementation of programmes that deliver soft assets such as business development training and other forms of support and guidance directly to rural enterprises.

By continuing to work with partners to realize the maximum benefits of rural electrification projects, Energy 4 Impact aims to improve the quality of life, livelihoods and prosperity of off-grid rural communities in Africa.