SNV Netherlands Development Organisation (SNV)
Results-Based Financing (RBF) for Pico-Solar Market Development
Mwanza, Lake Zone, Tanzania
Expected completion in 2017
SNV Netherlands Development Organisation (SNV) is a notfor-profit international development organisation. Founded in 1965, SNV has built a solid local presence in many of the poorest countries in Asia, Africa, and Latin America. In energy, the focus is on the themes climate change and sustainable energy markets, under which the organisation engages in clean cooking and heating, as well as off-grid electricity
In rural Tanzania, access to clean and affordable energy for lighting is a major challenge. Only 20% of the rural population live within the reach of the national grid and even for those who are on-grid, the power supply has been very erratic in recent years. Most people in rural Tanzania rely on kerosene for lighting, which consumes a significant part of a typical household’s monthly income and has severe health impacts.
The dissemination of off-grid solar lighting solutions (solar lanterns, kits and home systems) could provide all rural households in Tanzania with clean, accessible and affordable lighting and basic electrification.
SNV supports the private sector, by providing financial incentives to import-suppliers of quality solar products, to scale their operations into new rural markets and engage in last-mile distribution of their off-grid energy products and services. Payment of the incentives can only be claimed after the sales of approved solar products and/or services are verified. The value of the sales incentive is determined by the energy service that the product provides (brightness and runtime).
A competitive Results-Based Financing (RBF) Fund with 1,000,000 EUR worth of incentives – funded by the British Department for International Development (DFID) through the Energising Development (EnDev) programme – is managed by SNV and hosted by TIB Tanzania Development Bank, through which the financial incentives are transacted. SNV’s main role in this project is to broker relations among actors that ensure fair, transparent and verifiable financial transactions throughout management of the fund.
At mid-year 2016, 55,000 rural Tanzanians benefitted from Lighting Global approved solar products sold under the RBF project, while results keep growing due to continued presence of the companies. A mix of 23 different solar products has been sold. As a result, almost 400,000 EUR have been verified as claimable for direct payment to the private sector. Towards the end of 2017, the project expects to have provided energy for lighting and electrical applications through solar power for 181,000 people.