British International Investment (BII), the United Kingdom’s development finance institution, has announced a robust financing agreement with Meridiam to support Rift Valley Energy’s expansion in Tanzania. This collaboration aims to bolster renewable energy resources, highlighting a major stride in providing clean, affordable power to the nation’s underserved regions.
British International Investment Financial Commitment and Project Scope
British International Investment has committed $15 million with the possibility of increasing the investment to $25 million to fund Rift Valley Energy, a Tanzanian-based renewable energy developer now under the ownership of Meridiam, a global investment firm. The infusion of funds is earmarked for augmenting Tanzania’s national grid with an additional 7.6 megawatts of renewable power derived from wind and hydropower projects.
The scope of this project extends beyond mere power generation. Approximately 170,000 individuals per year will benefit from this initiative, and it will facilitate the first-time grid connection for about 4,000 households and businesses. This expansion plays a crucial role in bridging the significant energy access gap in Tanzania, where the national electrification rate stands at a mere 37 percent, plunging to as low as 24 percent in rural locales.
Projected Impact of Renewable Energy Expansion in Tanzania
| Metric | Details |
|---|---|
| New Renewable Capacity | 7.6 MW |
| Annual Carbon Emissions Reduction | 17,000 tonnes by 2027 |
| People Powered Annually | 170,000 |
| First-time Grid Connections | 4,000 businesses and households |
| New Jobs Created | 1,800 |
Nick O’Donohoe, Chief Executive Officer of British International Investment, during a week-long tour of East Africa, including Tanzania, emphasized the transformative impact of this initiative. “Millions of people in Tanzania do not have access to energy, which greatly impacts their ability to access essential services and opportunities,” he stated. The British International Investment-Meridiam partnership through Rift Valley Energy is set to enhance educational opportunities, healthcare services, job creation, and industrial productivity across rural Tanzania.
Further detailing the benefits, the project is anticipated to create 1,800 new jobs powered by the new energy infrastructure. These roles will emerge across various sectors, particularly benefiting local industries such as tea processing and timber production. Additionally, the initiative is expected to prevent up to 17,000 tonnes of carbon emissions annually by the conclusion of 2027, marking a significant step towards environmental sustainability.
Meridiam, through its Deputy CEO and Africa Head Mathieu Peller, expressed firm confidence in the investment and its alignment with the company’s mission. “Rift Valley Energy is an investment which is true to Meridiam’s mandate and purpose, and we are pleased to partner with British International Investment to grow the renewable energy projects being developed by the company,” Peller noted. He underscored the investment as a reinforcement of Meridiam’s commitment to supporting Tanzania’s ambitious economic development plans through sustainable investment.
Rift Valley Energy’s Renewable Portfolio
Rift Valley Energy currently manages a portfolio that includes the only operational wind farm in Tanzania, alongside significant hydropower resources. These facilities not only support the national grid but also empower local communities by providing reliable and sustainable energy sources that are crucial for economic and social activities.
The broader relationship between British International Investment and Meridiam has been marked by a series of impactful collaborations across East Africa. British International Investment’s portfolio in the region is valued at $1.4 billion, with commitments surpassing $355 million in 2023 alone, covering essential sectors such as clean energy, infrastructure, telecommunications, and financial services.
Some of the notable investments by British International Investment in the past year include a $30 million investment in TowerCo of Africa Tanzania to build 200 additional telecommunications sites, which will link previously isolated populations. Another significant commitment was a $30 million anchor investment to Helios Towers as part of its $700 million public bond offering, aimed at mobilizing private capital to support Africa’s digital transformation.
Moreover, British International Investment has demonstrated its commitment to sustainable financial solutions through a $15 million anchor investment in the Tanzania shilling tranche of the NMB Bank sustainability bond, the largest ever issued in East Africa. This is in addition to a $100 million risk-sharing facility with Citi to support trade finance in frontier and emerging African economies, and a $5 million debt facility in Kenyan-based transport group BasiGo for the delivery of 100 electric buses.
As British International Investment and Meridiam forge ahead with their latest project in Tanzania, the implications for local communities are profound. This partnership not only underscores the commitment of both entities to fostering sustainable development but also paves the way for a brighter, more connected, and sustainable future for Tanzania’s rural and underserved areas. This strategic collaboration sets a precedent for other development finance institutions and private sector players looking to invest in the burgeoning field of renewable energy and infrastructure in Africa.
Discover more from Techish Kenya
Subscribe to get the latest posts sent to your email.
