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Stand Alone Solar (SAS) Market Update: Tanzania

 

Being a leading market for SAS, Tanzanian (like many others) has been heavily impacted by COVID-related sales declines, layoffs, furloughed workforces and increased operational costs.3 Other challenges facing the sector have recently included:

  • Government bias toward large grid-focused energy access projects,
  • Limited data on SAS potential market segmentation, both off-grid and on-grid, and consumer willingness to pay,
  • Uncertainty surrounding the regulation of pay as you go (PAYG) companies as financial institutions by the Bank of Tanzania (BoT) under the Microfinance Act of 2018, clarified during a BoT-PAYG company roundtable discussion in November 2020,
  • Limited financing for both consumers and SAS companies, or difficulty accessing available financing opportunities, both grant and commercial, due to high eligibility requirements,
  • Limited capacity by the Tanzania Renewable Energy Association (TAREA) to deal with issues of concern between the government and private sector, including growing mistrust by government of perceived lack of transparency in the private sector,

In 2019, more than 60 per cent of the Tanzanian population was still not connected to the grid even after ambitious grid extension initiatives, indicating a potentially large market for SAS solutions.

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