Millions of Tanzanians who have struggled to meet the cost of connecting their homes to electricity could get relief under a new financing arrangement between Tanzania Electric Supply Company (TANESCO) and CRDB Bank.
The partnership, launched in Dar es Salaam on Friday, will finance electricity connections for eligible rural households and provide affordable loans to customers in urban and peri-urban areas.
The initiative is expected to help Tanzania accelerate household connections as the country works towards universal electricity access by 2030.
Vice President Deogratius Ndejembi, who witnessed the signing of the agreement, said the programme should make electricity more accessible to citizens while opening opportunities for businesses, employment, education and household development.
He also directed the institutions involved to regularly assess the impact of the programme to ensure that it delivers measurable benefits to citizens.
The first phase will focus on rural households, with CRDB providing TZS27,000 for each eligible household to meet the electricity connection cost.
The money will be paid directly to TANESCO, meaning qualifying households will not be required to repay the amount.
For urban and peri-urban customers, CRDB will provide financing through affordable loans, with repayment arrangements to be determined by the bank.
The arrangement could be significant for households that live in areas already served by the electricity network but cannot afford the upfront cost of connecting their homes.
Mr Ndejembi said the partnership was part of Tanzania's efforts to implement the Mission 300 initiative, which aims to connect 300 million people across Africa to electricity by 2030.
“I commend TANESCO and CRDB Bank for this important initiative to make it easier for citizens to access electricity,” he said, describing the partnership as an example of public and private institutions combining resources to address challenges directly affecting citizens.
TANESCO managing director Lazaro Twange said the utility currently has about 6.4 million customers, but the new financing arrangement is expected to support efforts to connect about 1.7 million households annually.
The target is part of a wider government strategy to expand access to electricity and ensure that investments in power infrastructure translate into more connected households.
For many households, access to electricity can go beyond lighting. Reliable power can enable small businesses to operate for longer hours, support productive activities, improve access to digital services and create better conditions for children to study.
TANESCO board vice-chairperson Ambassador Zuhura Bundala said the programme was expected to create opportunities in employment, production and business while improving the learning environment.
“We expect this programme to reach many citizens, who we believe will benefit from opportunities including employment, production, business and better conditions in the education sector,” she said.
Energy Minister Juma Homera said the partnership would enable citizens to benefit more directly from the government's investment in electricity infrastructure.
CRDB managing director Abdulmajid Nsekela said the bank had committed TZS1 billion annually to the programme.
The bank will also work with TANESCO to educate citizens about the financing arrangement and how they can use electricity to improve their livelihoods and economic activities.
The partnership comes as Tanzania seeks to close the gap between electricity availability and actual household connections.
Under the National Energy Compact, the country aims to increase electricity access from 78.4 percent to 100 percent, while raising the proportion of citizens connected to electricity from 46 percent to 75 percent by 2030.
The government has set an additional target of reaching about 1.7 million households a year, making the availability of affordable connection financing an important part of efforts to achieve the target.
Mr Ndejembi said the success of the programme should ultimately be measured by its impact on citizens.
Regular assessments, he said, would be necessary to determine whether the financing model was increasing connections and generating the expected social and economic benefits.
For rural households, the immediate benefit will be relief from the connection cost where they qualify for the TZS27,000 financing. For urban and peri-urban customers, the programme provides an alternative way of spreading the cost through bank financing.
The initiative therefore shifts part of the focus from simply expanding electricity infrastructure to helping households afford the final step of getting connected to the grid.