Sustainability, Inclusiveness & Governance of Mini-Grids in Tanzania.

Insights from TaTEDO-SESO’s SIGMA Project Research Across Nine Regions

TaTEDO–SESO, under the UKRI-GCRF SIGMA Project, has completed an extensive field  research-based assessment of Tanzania’s mini-grid landscape. Covering 18 mini-grids across nine regions—Ruvuma, Njombe, Iringa, Dodoma, Morogoro, Pwani, Kilimanjaro, Kigoma, and Tanga. The study provides a rich evidence base on the status of sustainability, inclusiveness, and governance of mini grids in Tanzania.

The research, conducted in collaboration with international project partners from the University of Sussex and De Montfort University, forms part of a wider Africa-focused initiative examining mini-grid performance in Tanzania, Kenya, Nigeria, and Senegal.

A Diverse Mini-Grid Landscape

The field research analysed mini-grids powered by different technologies—hydro, biomass, solar PV, wind, diesel, and hybrid systems—representing faith-based, private, community, and public-private business models. Out of the 18 systems visited:

• Thirteen were operational,
• Five were non-operational, including some dismantled and relocated following technical failure or grid encroachment.

Mini-hydro and biomass combined heat and power (CHP) plants demonstrated the strongest technical performance, while solar PV, wind, and hybrid systems continue to grow in competitiveness. Biomass gasification and diesel/vegetable oil systems showed significant unreliability and fuel-supply challenges.

Key Findings

1. Sustainability of Mini-Grids

Technical Sustainability
Many systems showcased robust engineering, particularly hydro and biomass CHP plants. However, several sites face challenges such as:

• limited availability of spare parts
• lack of preventive maintenance
• declining water resources for hydro systems
• obsolete technologies and feedstock shortages

Training and strong O&M frameworks were observed to be central to long-term system reliability.

Financial Sustainability
Mini-grids selling directly to TANESCO as Small Power Producers (SPPs) through standardised feed-in tariffs demonstrated the most stable financial prospects provided tariffs remain cost-reflective.
Conversely, very small mini-grid operators depending on rural households financially struggle due to:

• high service provision costs
• limited productive-use demand
• low ability to pay

Business models integrating PAYGO systems, productive-use appliance financing, or supplying anchor customers performed better financially.

Environmental Sustainability
Environmental risks—particularly deforestation, siltation, and water conflicts—impact several hydro and biomass systems. Regular environmental monitoring and community engagement remain essential.

2. Inclusiveness and Community Participation

Most mini-grid projects involved communities throughout planning, construction, and operations. Faith-based and community-owned systems highlighted strong social cohesion but often lacked sustainable financial management.

Gender inclusion varied considerably between sites. Positive examples included mini-hydro plants in Ruvuma operated largely by trained Benedictine Sisters—showcasing women's leadership in technical operations.

Electrification has delivered significant social benefits:

• improved lighting, communication, and security
• enhanced health and education services
• reduced rural-urban migration
• expanded opportunities for local youth employment
• boosted local economic development

• increased agricultural productivity
• supported the digital inclusion, i.e., accessing the internet and digital tools

3. Governance and Regulatory Framework

Tanzania’s regulatory environment—anchored by EWURA, REA, and the national grid code—is well developed. Key strengths include:

• clear SPP licensing frameworks
• standardised PPAs and feed-in tariffs
• flexible provisions for grid integration

However, grid encroachment continues to disrupt mini-grid viability. Many systems are forced to coexist with the main grid, sometimes without clear compensation or transition pathways. Tariff-setting remains a politically sensitive area involving multiple stakeholders.

4. Customer Experiences: Households, SMEs and Public Institutions

Across the visited sites:

• Firewood and charcoal remain dominant cooking fuels, with limited e-cooking adoption.
• Households primarily use electricity for basic services—lighting, phone charging, powering radios, and TVs.
• SMEs such as milling, welding, refrigeration, salons, and shops benefit substantially from mini-grid power, often expanding operating hours and increasing income.
• Some operators offer loans for productive-use appliances, boosting local economic activity.
• Schools, health centres and water services experience improved reliability where mini grids perform well.

Conclusion  and Way Forward

The SIGMA research confirms that renewable mini grids remain an alternative and essential solution for electrifying Tanzania’s remote communities where grid extension is costly or delayed. To unlock their full potential, Tanzania requires:

• Enhanced financing mechanisms, especially for O&M and risk mitigation
• Predictable and cost-reflective feed-in tariffs
• Productive-use stimulation strategies to stimulate demand
• Clear rules for grid–mini-grid coexistence and compensation
• Stronger local capacity for technical operations
• Continued community involvement and improved gender inclusion

Strategic partnerships between the Rural Energy Fund (REF) and international development actors are crucial to scaling sustainable mini grids across Tanzania and Sub-Saharan Africa.

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