Investment in Tanzania’s first wind farm ‘is blueprint for other projects’, says IFC

The World Bank’s International Finance Corporation (IFC), which is backing the project in central Tanzania’s Singida province, around 700 kilometres from Dar es Salaam, said the facility will be “a blueprint to wind developers eyeing Tanzania”.

According to the IFC the Singida project will increase Tanzania's installed generating capacity by 100 megawatts. The facility, which will cost a total $285 million to develop, is expected to start operating by December 2017 and provide “a stable and inexpensive source of power”.

The IFC, which will advise Singida’s management “on environmental and social best practices”, said the project “required significant financial and technical resources from private investors”.

In addition to the IFC UK-based Aldwych International, a leading developer of African power projects and Tanzania-based telecoms operator Six Telecoms, are contributing towards the project. The IFC has said the three organisations will contribute $18m during the development phase and $71m in total equity. The Singida facility will be owned by Wind East Africa Limited and operated by a management company led by Aldwych and Six Telecoms.

Helen Bone of Pinsent Masons, the law firm behind Out-Law.com, said: “The continent has yet to seriously tap into its huge sustainable energy potential, but this project shows a fresh impetus to utilise green power. Other East African nations will surely want to follow suit and make the most of their natural resources and the attractive cost benefits of green energy.”

The IFC said that although Singida has broken ground, “the journey to this point was challenging”. “To develop Tanzania’s first ever wind farm, IFC and partners had to run technical studies on winds, the grid, power flow, load, and other factors previously not reviewed in this region.”

“While Singida is Tanzania’s first wind project, it may not be the last,” the IFC said. “Only 38% of Tanzania is electrified, with demand for electricity growing nearly 15% per year. The country’s vast water and gas reserves will continue to provide the bulk of power, but Tanzania seeks to wean its electricity away from aging, unreliable hydropower plants. Private initiatives like Singida are another step towards filling the power gap.”

Financing for Singida by the IFC is being provided through the corporation’s InfraVentures global infrastructure project development fund. The IFC said it has invested more than $3 billion in renewables over the last five years, “including 40 wind projects in Asia, Africa, South America, and Europe”. 

A report published by the UN’s Economic Commission for Africa last year recommended boosting ‘energy trade’ in Eastern Africa, by encouraging private investors to develop the energy infrastructure of individual states to maximise regional economic growth.

According to the International Monetary Fund (51-page / 1.03 MB PDF), Tanzania also has “good prospects” over the next decade of becoming a major producer and exporter of natural gas.

Tanzania has an increasing need to boost domestic electricity production. Tanzania’s high commissioner to Zambia Grace Mujuma was reported as saying recently that, because of unexpectedly low levels of water in the country’s reservoirs, several hydropower plants had been taken out of service.

Mujuma said there was a possibility that operations might be suspended at all hydropower plants in Tanzania if water levels continued to fall. However, she said “natural gas will help in cushioning the unprecedented electricity shortage” in the country.