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Hydro Power in Rural Africa

Writer: Jacopo Pendezza is a Rural Electrification Project Manager at CEFA in Tanzania. He has a BA in International Development and Cooperation from Università di Bologna (Italy) and a MA in European Studies from Université Libre de Bruxelles (Belgium). Jacopo specializes in project management, energy policy, rural development and non-profit/for-profit partnerships.

Photographer: Giacomo Spigarelli

Small hydro power is one of the most viable

options to providing electricity to rural communities

in sub-Saharan Africa with the force of water.

Tanzania has all the geographic conditions for

scaling-up small hydro power projects to the national

level. The example of a non-profit/for-profit partnership

between CEFA, an Italian NGO addressing rural

electrification, and a private partner to realize a small

hydro power project in Ninga, Tanzania, is a great starting

point to expand rural energy access and meet national

targets for electrification and energy production.

Renewable energy technologies have great

potential to contribute to rural energy sup-

ply in sub-Saharan Africa. While the energy

transition potential is tremendous across

Africa, in most cases government investments

and donors’ budgets have unfortunately not

been financing sustainable small hydro power

plants that could provide energy access in

a decentralized manner to rural populations.

However, energy production and distribution

in Tanzania is now a national priority and a

promising business opportunity, because

policy and legal frameworks provide a good

environment for investments and subsidies.

Still, there is a great need for mobilizing

financial resources to expand energy access

for rural communities. Non-profit/for-profit

partnerships (NPFPP) can occupy a fruitful

“middle ground” between commercial private

sector projects, focused primarily on profit and

public/non-profit sector projects focused on

enhancing energy access.

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In sub-Saharan Africa, biomass energy

continues to dominate national energy

portfolios with around 625 million people

being dependent on wood and charcoal

for cooking and heating. Yet 585 million

people live without access to electricity:

sub-Saharan Africa is the region with the

lowest energy access in the world. Elec-

trification rates are particularly low in rural

areas (with the exception of South Africa); in

most countries, less than 10% of the popu-

lation is not connected. Sub-Saharan Africa

electrification is prevented by the high

cost of grid expansion and by the limited

production capacity and dependence on

imported fossil fuels. In sub-Saharan Africa,

biomass energy continues to dominate

national energy portfolios with around 625

million people being dependent on wood

and charcoal for cooking and heating. Yet

585 million people live without access to

electricity: sub-Saharan Africa is the region

with the lowest energy access in the world.

Electrification rates are particularly low in

rural areas (with the exception of South

Africa); in most countries, less than 10%

of the population is not connected. Sub-

Saharan Africa electrification is prevented

by the high cost of grid expansion and

by the limited production capacity and

dependence on imported fossil fuels.

Small hydro power, along with photovoltaic

panels, are the most viable and feasible

options for water and solar power to provide

electricity for lighting and communication as

well as to provide sufficient power capacity

to deliver the mini-grid the basis for various

forms of productive uses of electricity includ-

ing small industrial applications. Typical

capacity ranges from a few kilowatts (kW)

for micro-hydro to a few megawatts (MW)

for small-hydro, depending on various fac-

tors such as hydrology, load demand, and

geographical constraints. Small hydro power

offers a chance to tackle the three major

challenges for developing the African energy

sector by helping to increase rural electrifi-

cation rates, installing additional capacity for

national and local grids (independent from

imported fuels), and promoting productive

use of energy in poor areas.

Twelve percent of the world’s hydroelectric

potential is in Africa – and due to geo-

graphical conditions most of this potential

is located in the sub-Saharan region – but

Africa’s Great Untapped Potential

71

and a number of religious mission facilities

and mechanical mills. In most African coun-

tries, existing small hydro plants are funded

by NGOs and international donors; most are

not well documented and remain isolated

projects that have not been scaled-up.

In the last decade, however, some countries

have made progress in promoting small

hydro more systematically, moving away

from demonstration and pilot programs

to large-scale initiatives. In countries like

Rwanda, Kenya, Ethiopia, South Africa

and Tanzania, decentralized renewable

technologies such as small hydro power

have been mainstreamed in regional and

national policy documents. In Rwanda,

small hydro contributes a significant por-

tion to installed capacity and even micro

hydro is beginning to make a significant

contribution. Key to the Rwandan success

has been a sector-wide approach by vari-

ous donors, led by a strong Ministry for

Infrastructure who sets clear targets and

provides a policy framework and budgets

for the electrification of the country. While

governments and donors in some coun-

tries bundle their efforts together to push

for greater electrification, private project

developers are also taking an increas-

ing interest in decentralized renewable

technologies. The pioneers are leading to

larger, more sophisticated companies with

in no other continent is the gap between

actual and technically available hydro power

higher than in Africa where only 5% of this

potential is currently exploited. Looking at

the small and micro hydro systems, the gap

is probably even higher. While China has

developed over 45,000 plants of 10 MW, in

Africa there are no more than a few hundred

small hydro plants in operation.

Small and micro hydro plants have a long

history in Africa, but have not proliferated

on a massive scale, despite the favorable

regional geographic conditions. Early elec-

trification projects comparable to European

developments include, for example, the first

hydroelectric plant built in 1895 in Cape

Town, South Africa. Such hydroelectric sys-

tems operate on large farms and industries,

strong links to international players. The

European Small Hydro Association (ESHA)

considers Uganda and Kenya as countries

with promising short-term small hydro

power markets, while countries such as

Mozambique, Zambia and Rwanda offer

good medium-term perspectives.

Due to a lack of reliable and comparable

information, it is difficult to elaborate a base-

line for small hydro development in Africa.

This is true for mini and micro hydro sites,

which are documented only in a few well-

known cases. In many countries, most of

the existing plants still date back to colonial

times; many of which were established by

church missions. In Tanzania, for example,

more than 16 small systems were installed

by church missions in the 1960s and 1970s.

In Kenya, small hydro plants from the 1950s

are still operating. In South Africa, there

are hundreds of de-commissioned plants,

waiting for rehabilitation, while only a few

new plants have been constructed in the last

years. Many of the old sites mentioned in

historic reports are forgotten and cannot be

located today. Figures about recent projects

are easier to obtain because government

action plans and information of ongoing

donor funded projects allow for more accu-

rate estimations. Tanzania has good natural

resources and the political willingness to tap

into its small hydro power potential.

Sub-Saharan Africa is the

region with the lowest energy

access in the world

Electricity access in 2010 - Regional aggregates

Source: IEA, World Energy Outlook 2012

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Hydro power is the most popular and the

oldest renewable energy sources used to

produce electricity for rural grids. Abundant

and old experiences exist in several develop-

ing countries such as Tanzania. The assessed

potential of small hydro power resources of 10

MW in Tanzania comes out to be about 480

MW. Small hydro projects contribute only 15

MW to installed grid-connections, and most

of these projects are privately-owned and are

not connected to the national electricity grid.

Five sites in the 300–8,000 kW range are

owned by Tanzania Electric Supply Company

(TANESCO), the national distribution utility.

Examples of privately-developed projects

include Mwenga, a 4 MW hydro plant that

supplies power to nearby rural villages, with

excess energy sold to TANESCO; AHEPO, a

1 MW privately-owned small hydro project

in Mbinga, currently under construction, that

will supply power to TANESCO’s isolated grid

and directly to communities.

Different instruments and projects are set

up by the government and donors to support

small hydro power expansion. The Ministry

of Energy and Minerals (MEM) is now con-

ducting feasibility studies in eight regions:

Morogoro, Iringa, Njombe, Mbeya, Ruvuma,

Rukwa, Katavi, and Kagera. The British NGO,

GVEP International, in partnership with the

Tanzanian Rural Energy Agency (REA), is

supporting the development of six hydro

mini-grids, with a total capacity of 7.4-8.8

MW. The REA has awarded some 20 match-

Tanzania’s Water Power

Non-profit/for-profit partnerships are one of

the best mechanisms to overcome budgetary

constraints for providing energy access

ing grants to private sector developers for

small hydro feasibility studies. In addition,

the Energy Sector Management Assistance

Program (ESMAP) has approved funding for

renewable energy resource mapping, starting

with small hydro power, including two-year

hydrology measurements. The United Nations

Industrial Development Organization (UNIDO)

is co-funding the development of six mini-

grids based on micro hydro power, while the

European Union is financing four hydro power

projects, including one developed by CEFA.

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Rural Electrification in TanzaniaThe European Committee for Training and

Agriculture (CEFA) is an Italian NGO that

promotes initiatives of development, coop-

eration and international volunteer services.

Founded in 1972 by a group of agricultural

cooperatives based in Bologna, CEFA supports

projects aiming to promote integrated self-

development in rural regions of the Mediterra-

nean, East Africa and Central/South America.

Active in Tanzania since 1976, CEFA promotes

interventions in rural electrification, water

supply, agriculture and agro-processing.

CEFA’s commitment to rural electrification

in Tanzania began 25 years ago and in this

period the organization has realized three

mini hydro-electric power plants, providing

electricity to hundreds of people living in the

rural areas of the Iringa and Njombe Regions,

in the Southern Highlands.

Careful planning procedures for technical

capacity, good institutional arrangements,

managerial capacity and economic consider-

ations, as well as multi-stakeholder involve-

ment from the planning phase onwards, have

resulted in the sustainable operation of the

three hydro power plants. Such commit-

ments in the sector continue today with a

current upgrade project in Ikondo, a very

isolated village in the Southern Highlands of

Tanzania, allowing more and more families

to benefit from the opportunities offered by

having electricity in their villages. This project,

co-funded by European Union under the 10th

European Development Fund (EDF), started in

September 2011 and by 2015 will permit an

upgrade in output of the power plant to some

430 kW, and to increase the actual distribution

grid reaching four other villages, connecting

to the Matembwe grid and to the TANESCO

grid in order to sell the excess produced

energy to the national utility.

CEFA is aware that only with a qualitative jump

can impacts be incisive for a large population

that needs energy access, and has therefore

decided to take advantage of the opportuni-

ties and instruments that are now in place

in Tanzania to design a new project, the size

of which significantly differs from previous

ones. The site for the next intervention is in

the Rufiji River Basin in the Njombe Region.

The Ninga small hydro project, with an output

of 5 MW, will provide reliable and affordable

electricity to about 2,000 households and

small enterprises in seven villages, and will

sell the surplus energy to the main national

grid, increasing the regional availability of

power and assuring the financial sustainability

of the system. How is such a productive and

replicable solution to secure funding for this

sustainable project?

74

This article was presented at the POWER-GEN AFRICA conference POWER-GEN AFRICA

and exhibition “Equipping Africa’s Energy Future” in Cape Town

on 17-19 March 2014.

The next POWER-GEN AFRICA “Emerging Opportunities in the World’s

Fastest Growing Continent” will take place in Cape Town on 15-17 July 2015.

For more details, visit: www.powergenafrica.com

To learn more about CEFA projects, visit: www.cefaonlus.it/uk

Government investments and donors’ budgets

have been overall insufficient to expand access

to electricity in rural areas in a sustainable

manner. Mobilizing financial resources to

expand local energy services delivery in Tan-

zania is therefore an imperative. In a scenario

of diminishing funds for development programs

with simultaneous increasing demands from

donors in terms of the impact of actions sup-

ported, a new approach is necessary regard-

ing the action of non-profit actors, like CEFA,

in developing countries. Non-profit/for-profit

partnerships (NPFPP) are one of the best

mechanisms to supplement and overcome

budgetary constraints for widening access to

energy services, as they can allocate project-

risks between the public/non-profit and private/

business sectors. A partnership between non-

profit and for-profit actors is a good solution

to rapidly mobilize financial resources, expand

energy access, enhance the empowerment of

local communities, and meet national targets

for electrification and energy production.

Profit motivations are blended with social

concerns and empowerment of communi-

ties. The NPFPP model operates on the twin

foundations of sharing risks and rewards:

risk-sharing is reflected by the resources

invested by the private actor and non-profit

actor in the partnership. Providing rewards

is usually in proportion to the risk taken.

Additionally, rewards are reflected in the

availability of tangible incentives for the dif-

ferent players in NPFPP: to fulfill corporate

social responsibility and cost recovery/profit

for the private actor; achieving its mandate

to deliver basic services to local communi-

ties for the non-profit actor; and availability

and access to basic services for the target

communities. This incentive system is the key

to the sustainability of any NPFPP venture.

CEFA’s experience suggests that including

multiple stakeholders in program design,

implementation, and evaluation can enhance

the development of renewable energies.

Involving women’s groups, multilateral

donors, rural cooperatives, local govern-

ment, local micro-finance institutions, NGOs

and other members of civil society, like

consumers, can increase both the per-

formance and legitimacy of partnerships.

They improve performance since input

from multiple stakeholders can accelerate

feedback; they improve legitimacy since

programs with a broader support base and

community involvement are less likely to be

opposed. Above all, the partnership benefits

from the larger pool of resources coming

from the public and private sectors, and the

resources (social, human, financial, political

and psychological capital) of the communi-

ties also improve in return.

A Bigger NPFPP Model