On 23rd November 2021, KAKUTE Projects and SELCO Foundation from India convened a meeting of partners and stakeholders at the African Dreams Hotel in Dodoma to discuss the implementation of the Decentralized Renewable Energy (DRE) project that is Developing Grassroots Energy Innovations for Productive Use and Well-Being in Rural Tanzania that funded by DOEN Foundation from Netherlands and implemented by KAKUTE Projects in partnership with SELCO foundation, SAGCOT and Local Government Authority (LGA). The main objective is to improve rural livelihoods, which can be divided into agricultural and non-agricultural sub-sectors, which has been implemented in three phases namely Scoping & Identification, Ground Intervention & Forge Partnership and Documentation & Dissemination.
The meeting was attended by various people from different sectors such as Entrepreneurs (beneficiaries of the project), Solar technology solution suppliers/ technicians, Egg Incubator Fabricator, Financial institutions, Government institutions, journalists and Other project partners. The purpose of this meeting was to bring together the stakeholders and provide them with feedback on project implementation for two years of pilot, as well as to identify the achievements and challenges encountered during implementation and to agree on strategies to address them.
The meeting presentations and discussions were structured around four sessions which include
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Emerging Business Models for DRE – Livelihood Solutions in Dodoma
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Challenges and learnings from the enterprise side: Discussion on the key learnings and way forward from the supply side (energy enterprise and the technology providers.
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Role and potential of local government in complementing DRE – Livelihoods: Inputs and potential way forward on leveraging the support from Community Development Officers (CDOs)
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Unlocking financing for DRE solutions: Barriers, possibilities, potential solutions to complement livelihood programs in Tanzania (Dodoma and beyond)
Decentralized energy services remain at the forefront in the fight against poverty. Small and Medium Enterprises (SME) are driving this effort to provide an alternative to Government owned utilities and other large energy providers in rural poor community in Tanzania. SMEs allow entrepreneurs to provide alternative energy supply in remote and rural areas while also providing jobs, lowering energy costs, and reducing carbon and other greenhouse gas emissions.
KAKUTE Projects makes renewable energy available for productive use in rural area where there is no connection to grid. Our integration is through technology innovators living in rural areas in Tanzania who share our vision by looking at the obstacles facing the end user. The solutions that involve financial (micro-loans), technical (a customized product) and social (training). We always aim at paving the way to clean, reliable energy for as many people as possible.
We have been able to install 16 technical solution to rural innovators living in Dodoma (Dodoma City district), Iringa (Iringa rural District) and Morogoro (Kilombero district). People access to renewable energy for productive use in Agricultural value chain, poultry value chain and livestock vaccination, water and sanitation, and Livelihood solutions.
These interventions focus on decentralized energy innovations and can improve livelihoods, and also develop implementation models that address both demand and supply-side challenges and result in equitable economic growth and reduce the impact of poverty in rural areas.
The biggest challenge for solar technology is that many people still do not know whether solar power can be used for production. Solar power equipment is expensive and requires a lot of capital so some people need it but they can’t afford it. Although Tanzania is trying to develop the renewable energy, there are challenges that disrupt the efforts that are initiated by the government and other renewable energy stakeholders in Tanzania and one of them is financing. The high initial investment cost and higher interest rate on loan and requirement for collateral as one among the critical challenges facing renewable energy development in most developing countries including Tanzania. Initial investment is a unique and essential tool for any project development as it enhances investor’s confidence and reduces the financial gap. There are few or no incentives for local manufacturing or importation of renewable energy equipment such as solar devices.
LESSON LENT FROM THE MEETING
DRE Private-sector enterprises play a critical role in delivering energy services. End user innovators and technology supplier lack of access to financing requires banks to be flexible in their investigations and to become familiar with specific issues facing this sector. There is a need for the public sector to invest in infrastructure that supports scale-up activities.
The impact of programs on Agri and non-Agricultural technology innovation-specific issues and the environment is important to consider in rural area DRE programs. Further, many issues facing the end user and private supplier are not energy specific, but applicable to all entrepreneurs in the supply chain in the sector. The workshop presentations and discussions stress the need for public and private sectors to take a nontraditional approach to public-private partnerships to support DRE technology employed in rural areas of poor community in the off grid. Deployment of this technology faces many challenges, including poor quality equipment, weak or unpredictable demand, the absence of quality control standards, and the lack of a viable manufacturing and commercial supply of energy efficient technologies and services. Nevertheless, the solutions and demonstration on the ground interventions are demonstrating that such an industry could be fully commercialized in the long run. It is possible for public-private partnerships to stimulate growth, improve efficiency, and make better use of subsidy funds. DRE is not just about providing electricity and technology; affordable maintenance systems are needed. Also, standards are needed to ensure technology is employed properly and equipment is installed properly.
RECOMMENDATIONS
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A lot of people have an insufficient understanding of these technologies. Most of the issues in renewable energy development and technologies such as knowledge of its establishment, application, and socioeconomic and environmental importance are still unknown to the public.
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Match the technology/equipment with local needs and ensure adequate infrastructure to support investment and
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Characterize the DRE Technology solutions as end user entrepreneurial at its People in this sector are not just focused on technology; they are developing innovative business models.
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Access to energy should drive economic development and consumers should be encouraged to be
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Consider alternative ways of performing investigations on entrepreneurs with little or no history of financial statements, especially in the project area
WAY FORWARD
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Decentralize production to keep distribution costs low and build production facilities close to markets to prevent loss of product during transport.
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Negotiate with micro-finance institutions to provide lower interest loans. Target end user and supplier of technology solutions, since the case study shows that end user have been more responsible borrowers than supplier, paying loans back on time.
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Keep production costs low to assure, at the bare minimum, the same benefits and profits seen in the production of DRE solution on the ground.
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Evaluate the ground intervention impact to community for sustainability, including agricultural and nonagricultural solution, as a possible way to reduce triagery high labor costs and make facilities economically viable.
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Provide quality control training to end user on the use of technology and business development services.
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Support technology producers with training in basic skills and best practices in accounting, raw materials procurement, inventory control, and marketing and promotion.
