Hivos International

Remote but Productive: using energy access investments to catalyse enterprises and income in Tanzania’s rural communities

While rural energy access investments – like mini-grids – can be expected to transform local economies, this doesn’t happen automatically. Catalysing local enterprises and raising incomes through productive uses of energy often requires extra measures, to overcome barriers such as gaps in local people’s skills or financial resources. In Tanzania there are huge opportunities for ambitious energy access investments to increase rural productivity, including milling, irrigation and small and microenterprises. This paper examines the experiences of two mini-hydro projects in Njombe region run by NGOs, and a solar-diesel mini-grid project in Tanzania’s lake zone run by a joint venture company. All three are exploring ways to combine energy with wider rural development processes. The paper investigates what interventions work, and offers recommendations for new entrants, policymakers and funders.