165 VILLAGES IN TANZANIA TO BENEFIT FROM MORE EFFICIENT AND RELIABLE SOLAR POWERED PUMPS

Solar Water Pump

ABOUT 165 rural Tanzanian villages in nine regions will have access to sustainable water supply through improved solar pumping systems through a new grant agreement signed between the Government and the World Bank amounting to US$4.5 million from the Global Partnership for Results-Based Approaches (GPRBA).

The World Bank’s long-term engagement in the water sector will now include a large pilot on “Solar Water Pumping via Innovative Financing” which will support the Government of Tanzania in moving from dated and inefficient diesel-powered pumps with clean and climate-friendly solar pumping systems. These new systems will help decarbonize off-grid water pumping in rural Tanzania and significantly reduce the cost of water extraction for at least 500,000 beneficiaries.

“The project opens up new resources of available funding to help close the vast investment gap for rural water supply in Tanzania and shift the focus to mobilizing private sector financing consistent with the World Bank's Maximizing Finance for Development (MFD) approach,” said Ms. Zaruhi Tokhmakhian, Acting Head, GPRBA.

This is the first attempt to leverage private sector financing in Tanzania’s rural water supply sector. To supplement GPRBA’s grant and to diversify sources of funding, the project uses a blended finance approach, combining debt finance and output-based subsidies. GPRBA funds will facilitate a 60 percent subsidy against loans for the Community-Based Water Supply Organizations (CBWSOs) to replace their diesel generators with solar-powered pumping systems. The debt finance will account for 40 percent of the investment and the CBWSOs will be able to repay the loan over a four-year period with additional money made available by eliminating the use of diesel fuel.

In addition, an innovative mobile-banking payment platform will be piloted to manage revenue collection from water sales and loan payments from participating CBWSOs directly to the participating local bank. The funding also includes a technical assistance component for training the CBWSOs to perform at a greater capacity for improved impact, and to encourage their practice of loan repayment to increase their creditworthiness and ability to borrow for future activities.

“The introduction of solar water pumping systems is expected to significantly reduce operation and maintenance costs for the CBWSOs, providing them with financial resources to lower the price of water to users and expand service to presently unserved communities,” said Prof. Kitila Mkumbo, Permanent Secretary, Ministry of Water.

To address the growing concern of the delivery of safer water for consumption, this project will also install simple chlorinators to improve the water quality delivered to communities. When fully achieved, a range of benefits will emerge from expanded access through the rehabilitation of water schemes including: increased reliability and sustainability of service, reduction of operating and maintenance costs, private sector involvement through a five-year service agreement, as well as other operational efficiencies and service improvements.

“With this project, we are seeking to introduce new technologies at scale to better facilitate private sector financing and sustainable rural water supply. It is our hope that the combination of solar water pumps, pre-paid meters, chlorination, remote sensors and 5-year service agreements will form the synergies which will shape a new era for the sector,” said Bella Bird, World Bank Country Director.