FEATURE-Solar panels power business surge - not just lights - in Tanzania

by Kizito Makoye | @kizmakoye | Thomson Reuters Foundation
Tuesday, 19 April 2016 14:07 GMT

Carpenter Hamisi Bujeje works at his solar-powered workshop on Ukara island in Tanzania. TRF/Kizito Makoye

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As the cost of solar panels plunges, solar is cranking up businesses in Africa - and helping them expand

By Kizito Makoye

UKARA, Tanzania, April 19 (Thomson Reuters Foundation) - Samwel Nyakalege's life has recently become more of a grind - and that's a good thing.

The 33-year-old miller from Bwisya village, on Lake Victoria's Ukara Island, is one of the first to benefit from a project to bring solar power to residents and business-owners.

The entrepreneur, married with four children, has worked grinding millet, maize, rice and beans since 2007, but the high cost of fuel for his diesel generator made it hard to turn a profit.

"I used to buy a litre of diesel for up to 3,000 Tanzanian shillings (about $1.40) and I needed at least 50 litres every week to run the generator. My business could hardly grow," Nyakalege told the Thomson Reuters Foundation.

But with the arrival of the first-ever solar-powered mini-grid at Bwisya, launched by JUMEME, a rural power supply company with government backing, Nyakalege has enough energy to run his power-hungry business - and no longer needs costly and polluting generators.

Cheaper power, in fact, means that he can expand his company.

"Solar power is a blessing to us as we can now serve more customers quicker and efficiently," he said. "I don't spend a penny to buy diesel. My motors work very efficiently using solar electricity."

SOLAR STEPS UP

Around the world, as the costs of solar energy plunge, it is increasingly being used to power industry and businesses, a huge step forward from simply supplying lighting and basic electrical power in places like Tanzania, experts say.

Nyakalege, for instance, now uses solar power to operate his three milling machines simultaneously. He has employed three people to help him and has seen his customer base rise to 600 a day.

His income also has grown as a result, from less than 100,000 shillings a day on average (about $45) to 400,000 shillings now.

He is now contemplating getting a bank loan to expand his business, he said.

Processing grain in Ukara, until recently, was a costly activity because the island was not connected to the electrical grid. Those who couldn't afford diesel-powered grain-milling services often had to grind their staple foods of cassava and maize by hand, a time-consuming activity.

The solar system at Bwisya is part of a project to provide reliable and affordable electricity to the nearly 2,000 households and more than 200 businesses on Ukara, in order to boost opportunities to earn an income.

It is the first of 30 such systems JUMEME plans to install over the next two years. They are expected to supply power to around 100,000 people, company officials said.

The company has even bigger plans for the longer-term, they said.

"Our goal is to set up 300 systems and serve up to 1 million people in rural areas across Tanzania by 2022, making JUMEME the largest mini-grid operator in the country," said Thadeus Mkamwa, one of the company's directors.

The project, jointly funded by the European Union and private investors with political support from the Tanzanian government , has a total budget of 38.4 billion shillings ($17.6 million), Mkwama said.

PRE-PAID SOLAR POWER

In Bwisya, the largest village on Ukara, 250 customers are due to be connected to a hybrid power station consisting of a 60-kilowatt (KW) solar photovoltaic system and a 240 KW-hour battery bank. A diesel generator provides back-up.

The system will be extended in the second half of this year to connect the other villages on the island, Mkamwa said.

The installation charges for individual homes and business are repaid by customers in instalments. Consumers pre-pay for their power, with costs per unit depending on the amount of electrical equipment they use.

JUMEME is working with GVEP International, a nongovernmental organisation, to train people on Ukara to use electricity for business purposes, such as producing wood and metal crafts.

Hamisi Bujeje, 30, has dreamed of owning a big carpentry workshop since he helped his father build canoes and dhows as a boy. But he said he has so far struggled to turn a profit in the business he started in 2011.

"My business has not been doing very well because of lack of power. I was incurring huge operational costs. I used to travel 29 km (18 miles) to the nearest island of Nansio to access electricity and have some items fixed," Bujeje said.

But along with cheaper solar power, he has access to new carpentry equipment, business coaching from GVEP and a loan scheme offered to entrepreneurs by JUMEME.

"I am looking forward to expanding my business and attaining my dream in the furniture industry," Bujeje said.

Domestic customers of the new solar power supply are also pleased with the change.

"The system is very good and so helpful," said Kulwa Mwenguo, a resident of Ukara "I have access to lights, charge my phone and I listen to the radio."

Mwenguo says he pays 3,800 shillings ($1.70) each week for the service, less than two-thirds of what he use to spend on kerosene.

(Reporting by Kizito Makoye; editing by James Baer and Laurie Goering :; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, women's rights, trafficking and property rights. Visit http://news.trust.org/climate)

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