The Agence Française de Développement – French Agency for Development (AFD) and BANK OF AFRICA - TANZANIA have today signed a financing agreement for a credit line amounting to 20.67 billion TZS (12 Million USD) for Renewable Energy and Energy Efficiency.
The agreement was signed by Mr. Yves Terracol, AFD East Africa Community Regional Director, and Mr. Ammishaddai Owusu-Amoah, the Managing Director of BANK OF AFRICA - TANZANIA in the presence of Ms. Marie KELLER, the deputy Head of Mission of the French Embassy in Tanzania, Mr. Dennis Munuve, Acting AFD Country Director for Tanzania and representatives of Confederation of Tanzania Industries(CTI).
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| BOA Bank Tanzania Managing Director, Mr Ammish Owusu-Amoah and AFD East Africa Community Regional Director Mr. Yves Terracol exchange convention papers during the signing ceremony. |
The Renewable Energy & Energy Efficiency financing Programme is designed to enhance the banking sector to finance Renewable Energy and Energy Efficiency. Renewable Energy (RE) projects are those producing any form of energy (heat, steam, power) without any fossil fuels or any radioactive source, including hydroelectricity, wind power, biomass & biogas and solar energy. Energy Efficiency (EE) projects are capital expenditure projects that allow consumers to use less energy for achieving the same or a higher level of energy services (output).
This project is part of a regional programme covering Kenya, Tanzania and Uganda funded by AFD though local banks in view of supporting the region to increase its energy security by developing Clean Energy from renewable energy sources and promoting Energy efficiency. This agreement makes available a credit line that will enable BANK OF AFRICA - TANZANIA to provide both short-term and long-term funding to both public and private sector clients to implement Renewable Energy and Energy Efficiency projects. The credit line is also accompanied with a technical assistance programme funded through the European Infrastructure Trust Fund (ITF) to support BANK OF AFRICA - TANZANIA, potential investors and Project developers to further build on their expertise in developing viable Renewable Energy and Energy Efficiency investments.
This support covers the entire investment process and includes energy audits and feasibility studies, preparation of project documents, as well as risk assessment and bank capacity building. Through this funding, BANK OF AFRICA – TANZANIA has developed the Renewable Energy Finance product that seeks to finance projects in renewable energy for corporate and individual households in the following areas in renewable energy:
Solar: This is the largest renewable resource available and the fastest in growing energy resource. It’s ideal for off grid applications making it suitable for rural electrification programs. Biomass: This is the most widely used form of renewable energy accounting for 7% of total energy consumption. Biomass uses a wide range of fuels including municipal solid waste, agricultural and forest waste and dedicated energy crops. Wind: This is huge and growing with ease of installations in locations with sufficient and reliable wind resources. The growth is currently at 30% worldwide in terms of uptake and installations Depending on the applicants and their projects, the funding will be in the form of short and long term loans, syndicated loans as well as project financing. The financing will range from a minimum of USD 2,000 to a maximum of USD 4 million.
This product, in line with AFD’s strategy through the Renewable Energy and Energy Efficiency project, will enable This product form BANK OF AFRICA – TANZANIA, in line with AFD’s strategy on Renewable Energy and Energy Efficiency project, will contribute to increasing energy efficiency and the share of renewable energy in the Tanzanian economy, consequently contributing to reduction of CO2 emissions and the pressure placed on fossil fuels. The facility will thus help in facilitating Tanzanian entities and businesses to invest in rationalisation of energy use, thus helping them to improve their efficiency and overall competitiveness as well as develop clean energy.
AFD strategy is anchored on support for environmentally sustainable development through mitigation of climate change by moving to low-carbon growth paths. This includes, among other things, improving energy efficiency, expanding the use of clean energy sources, and reducing greenhouse gas emissions.
AFD considers Infrastructure as one of the key pillars for sustainable development. It is in this regard that it envisions to supporting more projects in the energy sector in particular TANESCO Grid rehabilitation and Upgrade, development of regional power market through interconnectors notably the Kenya-Tanzania-Zambia Interconnection line. The AFD Groupe is indeed pleased to be expanding it’s long-term cooperation with the BANK OF AFRICA and engagement with the private sector as an engine for economic growth and development.
BANK OF AFRICA – TANZANIA is equally enthusiastic about developing a new, unique and relevant product that will meet the needs of its target market while at the same time contributing towards developing the country, region and continent as a whole.
Source: French Embassy in Dar es Salaam (www.ambafrance-tz.org)
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