In 2008, the Energy and Water Utilities Regulatory Authority of Tanzania (EWURA) promulgated Rules and Guidelines for the development of Small Power Projects ranging from 100kW up to 10MW (the SPP Framework) to capitalize on renewable energy opportunities. The SPP Framework was designed to promote small power project development through private investment by providing investment security and market stability, reducing transaction and administrative costs and delays, and expediting regulatory processes.
Pursuant to section 19(2) of the EWURA Act, EWURA consulted stakeholders during the review of the SPP Framework and prepared the Second Generation SPP Framework. This covers the development of small hydro, biomass, wind, and solar energy projects of capacity ranging from 100kW up to 10MW, and is based on two approaches: a Renewable Energy Feed-in Tariff (“REFIT”) approach for small hydro and biomass (not grown-biomass energy plantation) projects; and a competitive bidding approach for wind and solar projects with a capacity above 1MW up to 10MW.
The Second Generation SPP Framework is designed to respond to challenges identified during implementation of the First Generation SPP Framework and thereby further improves the conditions for small power project investments in Tanzania.
Small Power Producer (SPP) means an entity generating electricity in the capacity between 100kW up to 10MW using renewable energy, fossil fuels, a cogeneration technology, or some hybrid system combining fuel sources mentioned above and either sells the generated power at wholesale to a Distribution Network Operators (DNO) or at retail directly to a customer or customers. An SPP may have an installed capacity greater than 10MW but shall only export power at the interconnection point not exceeding 10MW.
In the same sense, an SPP developer means a person who promotes and constructs an SPP for the purpose of selling power to a DNO pursuant to an SPPA or to any other entity subject to terms and conditions they may agree.
Standardized Power Purchase Agreement (SPPA) means the power purchase agreement entered between a Distribution Network Operators (DNO) and the seller for the sale of electric power. For purposes of facilitating the development of mini grids, EWURA in collaboration with TANESCO and other stakeholders has standardized these agreements.
The competitive tendering procedure applies to the development of solar and wind small power projects, with a capacity between 1 and 10 MW power plants, with the purpose of connecting to the Main Grid or an Isolated Mini-Grid. It is noted that the competitive bidding does not apply in the case of small hydro or biomass projects.
In general, the competitive tendering procedure is broken down in two stages: a request of qualification (RfQ) stage, and a request for proposal (RfP) stage.
The competitive bidding is initiated from time to time by EWURA by issuing an RfQ. Small power project developers seeking to be qualified must then submit the requested documentation to the Electricity Infrastructure Procurement Committee (EIPC). Following review and appraisal, bidders which qualified should then submit a binding Project Proposal to the EIPC secretariat of the DNO together with a detailed description of the project.
In order to have a review of all the steps required for the licensing and relevant administrative and other documentation, please visit the Licensing section of this portal
Subject to the availability of funds, financing support for mini grid development projects could be provided through the Rural Energy Fund (REF), which is managed by the Rural Electrification Agency (REA). Information on applicable procedures is available in the Financing section of this Portal.
The following funding windows are currently available:
A Small Power Producer can sell electricity:
Tariffs for selling electricity produced by a mini grid as well as the process for the calculation of the tariffs are determined by EWURA.
As per the second SPP framework, feed-in tariffs for selling renewable energy to a DNO is based on technology-specific costs for hydro and biomass SPP with capacity from 100kW to 10MW (Regulatory REFITs).
For Main Grid connected and Isolated Mini-Grid solar and wind small power projects with capacity above 1MW up to 10MW, tariffs will be based on bid prices obtained through a competitive process (Bid REFITs).
For solar and wind projects with capacity up to 1MW - Very Small Power Projects (VSPPs) - tariffs for Main grid connected projects will be based on the approved REFIT of a 500 kW biomass project subjected to a 5% premium and a 15% premium be used to pre-determine Isolated Mini Grid connected VSPPs' tariffs or as may be determined by EWURA.
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