Electrification co-operatives bring new light to rural Tanzania

One possibility to accelerate the progress of rural electrification in developing countries could be to form independent electrification co-operatives that are allowed to generate and distribute electric power and set their own tariffs. This approach has been successfully tried in the village Urambo, located about 80 km west of Tabora in Tanzania. The co-operative was formed in 1993 and started regular operation in 1994 with 67 consumers. The co-operative received initial financial support for rehabilitation of a diesel power plant and some other investments. The national utility TANESCO has provided technical support and training for operators and an accountant. Despite a tariff more than 15 times higher than in the nearby town Tabora that is served by TANESCO, the number of consumers in Urambo has been growing and reached 241 in October 2002. About 70% of the supplied electricity in 2002 was used by households, 15% in businesses, 12% in institutions and public buildings and approximately 3% for street lighting. The reliability of the supply has improved from 80% in 1994, to 97% during 2002. The experiences must be considered as very promising. Several more electrification co-operatives have been formed in Tanzania and are looking for financing for the necessary initial investments.