Benefits and challenges to productive use of off-grid rural electrification: The case of mini-hydropower in Bulongwa-Tanzania

This paper presents a case study of a minigrid powered by a small hydro plant in the southern highlands of Tanzania. The approach was chosen to provide in-depth understanding on benefits and challenges facing a rural minigrid. The case focuses on productive use; i.e. electricity as a direct input to the production of goods or provision of services. The study applies an interdisciplinary approach consisting of a mix of qualitative and quantitative methods, which included stakeholder and user interviews and measurements of output power and water flow. The analysis shows that certain entrepreneurial activities emerged as an outcome of electricity access thru the minigrid; barber shops, welding machines, mobile phone charging, salons, photo copy, and lighting business centres. Major challenges are related to the initial set up of the mini-hydro power plant, i.e. to only service the hospital, as the idea and need for building a minigrid developed much later. A tentative conclusion is that subsidized electricity will not promote rural businesses unless other criteria are met. Moreover, the minigrid faced a number of technical problems partly because of lack of adequate technical resources such as technicians and spare parts but also from the poor-planning and non-saving culture. The study concludes that the minigrid has led to productive uses that are found elsewhere in grid-connected rural communities. The finite supply of energy however means that there are restrictions using electricity for certain productive use – there is a load shedding schedule in place for some of the power intensive machines - due to overload caused by the load and large number of connections. Finally, there is apparent room for improvement not the least regarding the tariffs, which do not reflect market price and hence may affect the sustainability of the system