Tanzania: Lilondi Hydro

Cascading the benefits of small hydro

Challenge

In rural areas of Tanzania, just 17% of the population have access to modern electricity. Reliance upon gathered wood for fuel impedes economic development and contributes to household air pollution.  Connecting rural communities to Tanzania’s limited national grid is expected to take several years, requiring significant investment. The Government of Tanzania’s Rural Energy Agency (REA) works to develop alternative routes to rapid rural electrification. One promising solution lies in the largely untapped potential of small hydro. Small hydro plants (< 10MW) can be connected to local mini-grids, delivering first-time power directly to homes and businesses in remote areas. Tanzania’s electricity regulator (EWURA) has developed a template small hydro  power purchase agreement which has generated some growth in the sector, however, it is estimated that just 3% of Tanzania’s 300-500MW potential for small hydro power generation has been developed to date.

Solution

Under development
US$0.4m
2016 - ongoing

The Lilondi Hydro project will develop a 4.5MW run-of-river hydro plant on the Lilondi River in Tanzania’s southern region of Ruvuma. The project, which will feed into the national grid, will bring voltage stability to the most remote areas of the expanding national grid, as well as substantially reducing the transmission and distribution losses that would otherwise occur within the grid. The project pilot will be used to demonstrate feasibility to the private sector and so raise financing and support for five subsequent projects ranging in size from 6MW-16MW. The portfolio will be delivered in partnership with a local rural utility, Virunga Power, generating a total of 48MW of power for rural homes and businesses.  Construction of the plant is expected to commence in 2020, with Lilondi becoming fully operational in 2022.

InfraCo Africa believe that, alongside lead developer Virunga Power, developing strong relationships with local communities will be key to the project’s success. The Lilondi project will partner with the local church and vocational school, bringing employment opportunities and ensuring that the community is actively engaged and consulted on the plant’s development. Delivering first-time access to clean, affordable power in Lilondi and other remote communities will promote small business growth in Tanzania’s frontier markets. The scalable portfolio model has considerable scope for replication across rural Tanzania and East Africa.

Development being led by Virunga Power

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