A look at Tanzania’s first wind farm

Work at Tanzania’s first wind farm has finally reached completion. Ilaria Grasso Macola speaks to the stakeholders involved in the project to find out how the project came about and what it can do for local communities as well as the wider country. 

Images: Camco  

The Mwenga project, the first wind farm to ever be built in Tanzania, has reached completion as installation and testing works were finalised in May.


The 2.4MW project – which received a $1.2m loan from the UK Government-funded Renewable Energy Performance Platform (REPP) – will be connected to an existing grid network, providing energy security to communities across the country.

/ The majority of REPP’s funds, £148m, were in fact donated by the government through the UK’s International Climate Finance. /

What is the Mwenga project?

Despite development works for the Mwenga farm starting in April 2018 – when German manufacturer Enercon was awarded a turbine supply contract – the project took off a year later.


REPP’s investment manager, Camco Clean Energy (Camco), arranged to extend a $1.2m subordinated loan from REPP, which was designed to maintain equity returns at a reasonable level in the context of a cost over-run and was approved by REPP’s investment committee in June 2019.

/ The majority of REPP’s funds, £148m, were in fact donated by the government through the UK’s International Climate Finance. /

Camco and REPP were not the only stakeholders in the project: given its position as REPP’s sole donor, the UK Government was also heavily involved in the wind farm’s development.


REPP is supported with £148m of funding from the UK’s International Climate Finance – a government-backed commitment to assist Global South countries when facing climate change challenges – through the Department for Business, Energy and Industrial Strategy (BEIS).


The Mwenga wind farm – consisting of three turbines and located in southern Tanzania’s Iringa region – will be connected to the existing rural grid, which is already operated by a 4MW hydropower plant, belgong to renewable energy developer Rift Valley Energy Group.

/ During the dry season, the hydropower plant is no longer able to produce 4MW of electricity. /

Forming a hybrid system with hydro

The hydropower plant has been operational since 2012 and has provided energy to 4,500 homes and businesses. The wind farm’s developers hope that the project, once operational, will connect 1,500 additional customers over the next two years.


Camco’s managing director Geoff Sinclair was satisfied with the project as it provided a “demonstration of wind’s potential in the country and hopefully paves the way for further wind projects.”


“It is also quite innovative in that it forms a hybrid system – another first for Tanzania – with an existing hydro project that combines grid, corporate and local offtake. Once completed, the wind farm will provide added stability and enable constant power to be provided to customers throughout the seasons,” added Sinclair.

/ During the dry season, the hydropower plant is no longer able to produce 4MW of electricity. /

The wind farm will also help with the hydropower plant’s seasonal unreliability. According to Dr Matthew Josephat Matimbwi, executive secretary at the Tanzania Renewable Energy Association (TAREA), the rationale behind the wind farm is largely to compensate for the low levels of water registered during the dry season.


“During the dry season, the hydropower plant  is no longer able to produce 4MW of electricity because of the river’s water levels. This is the driver behind the development of the wind farm, as well as an attempt to mitigate climate change."

Playing catch-up in the US

“In Europe, offshore wind has been there for a number of years, but I think in the United States we're a little bit behind that,” said Karustis.


Should it be successful, Halo’s approach could lead to a surge in US onshore wind, which has historically lagged behind other regions in terms of wind installation and production. Since 2016, according to the International Energy Agency, the US has installed just 22.6GW of new onshore wind capacity, compared to 30.7GW in the EU, and 50.3GW in China, struggles that Karustis hopes to address.


Last December, the Chinese Government approved a number of new offshore wind projects, totalling 13GW of production and costing around $13.3bn, as the country continues to invest in utility-scale power. Karustis hopes projects like Halo’s distributed turbine can contribute to a more balanced wind sector in the US, with both large- and small-scale operations expanding renewable power.


“The large-scale wind turbines wouldn't be phased out, it's kind of an ‘all of the above’ thing,” he said. “The large wind farms play a very important role for us in reducing the carbon footprint globally, and hopefully the micro wind market is going to augment that by producing energy where energy is being used. It's a good two-pronged approach.”


This two-pronged approach also includes other renewable power sources, including solar and utility-scale wind; Halo is not trying to replace all clean energy with its turbines, but offer another option for people eager to engage in renewable power, who may have been historically sidelined due to the high costs of building utility-scale facilities or the unsuitable geographical characteristics of the places they live.


“When you look at that market we're very excited because just as megawatt-scale wind is a large market, I think distributed wind can be as big of a market or bigger over time,” said Karustis.


“When you have incentives and improvements in the technology, the costs go down, so you can be more competitive and compete, and that's certainly the case with megawatt-scale wind,” he continued. “Just 15/20 years ago, it wasn't competitive with natural gas [and] coal, but it is now. So those government policies have helped and they've driven the technology improvements, so it's all bundled together.”

/ The country has also adopted a national energy policy which aims to increase electricity access from 36% in 2014 to 50% by 2025. /

Vision 2025: the wider context

The Mwenga wind farm is not an isolated case of renewable energy investment in Tanzania but is actually part of a bigger plan to help the country grow while transitioning to greener energy sources.


Vision 2025 is a general development plan established by the Tanzania Planning Commission in 1999 “to graduate the country from a least developed country to a middle-income country with a high level of human development by 2025”.


As part of Vision 2025, the country introduced in 2012 the Big Results Now initiative to speed up projects in the energy sector, improve electricity access, and generate 100MW of electricity from wind.


“The Mwenga wind farm aligns perfectly with Vision 2025, as one of the plan’s targets is providing electricity to the whole population, using all the renewable sources of energy and technologies possible,” said Matimbwi.

/ The country has also adopted a national energy policy which aims to increase electricity access from 36% in 2014 to 50% by 2025. /

The country has also adopted a national energy policy, called the National Rural Electrification Programme, which aims to increase electricity access from 36% in 2014 to 50% by 2025, focusing specifically on renewables.


The country’s climate and weather are also very conducive to wind energy. According to an analysis published in 2017 by the University of Sydney’s Institute for Sustainable Futures, the country has abundant wind resources, especially in the Great Lakes region, the plains, and the Rift Valley.


Areas such as central Tanzania’s Singida region and Njombe, in the western part of the country, have an average of 9.9m/s and 8.9m/s respectively, an adequate speed for wind-based electricity generation.

/ The wind farm will impact local communities by giving them the electricity needed to develop their economic activities. /

Impact on local communities and the future of renewables in Tanzania

Stakeholders cite the positive impact the Mwenga wind farm will have on local communities as the main rationale behind their decision to invest in the project.


Camco managing director Geoff Sinclair said that the wind farm will provide customers with a cheaper source of power.


“The project improves Mwenga’s rural network, providing a wider range of consumers with access to electricity supply that is cheaper than the national grid and more reliable than other sources of power. This will enable a faster rate of economic growth and job creation, along with significant health benefits.


“The project itself has so far created approximately 50 temporary jobs during construction and will create a further six permanent jobs during operation,” said Sinclair.

/ The wind farm will impact local communities by giving them the electricity needed to develop their economic activities. /

According to Dr Matimbwi, the Mwenga project will also benefit local communities by giving them the electricity needed to power their activities.


“The wind farm will impact local communities by giving them the electricity needed to develop their economic activities, continuing the work done by the hydro plant.


“In this area, people were using diesel-power engines to run their milling machines, which was very expensive. By using power from the Mwenga project, the costs of running the machines will lower and allow a margin for profit,” added Matimbwi.

/ Tariffs are regularly and somewhat randomly reduced to levels that undermine commercial viability. /

Barriers to foreign investment

Despite the energy resources available in the country and the government’s pledge to invest in renewable energy, foreign investors might still feel discouraged from investing in Tanzania.


Institutional and regulatory barriers are one of the main difficulties of developing renewable energy projects in the country, stakeholders say.


“It’s very difficult to get a bankable PPA signed, offtaker creditworthiness remains an issue, and tariffs are regularly and somewhat randomly reduced to levels that undermine commercial viability.


“Given the regulatory and institutional barriers I imagine a lot of investors are seriously asking themselves if it’s worth it to invest. On our part the answer is yes, but only where we can be confident that the risks that I mentioned are well mitigated,” added Sinclair.

/ Tariffs are regularly and somewhat randomly reduced to levels that undermine commercial viability. /

Organisations like TAREA, which lobbies for the use of renewable energy at an institutional level, might be the point of contact between private investors and the government.


“Our responsibility is negotiating with the Tanzanian authorities to enable the private sector to develop renewable energy technology. This is our main role,” concluded Matimbwi.

REGIONAL FOCUS

Share