The money that was approved on Thursday under the International Development Association (IDA) will also see the isles experience a reduction in annual unplanned system outages and associated losses.
A statement issued by the WB country office states that the 328.6bn/- is meant for financing the Zanzibar Energy Sector Transformation and Access Project (ZESTA), whose development objectives are to expand access to reliable and efficient electricity services and to scale up renewable energy generation in the archipelago.
The fund comprises a 270.7bn/- (117m US dollars) credit from IDA, 50.9bn/- (22m US dollars) loan from the Clean Technology Fund (CTF) and 6.9bn/- (3m US dollars) CTF grant.
“Zanzibar made modest progress in reducing the population living below the poverty line since 2010, but like everywhere else in the world, this achievement is being tested by the Covid-19 pandemic,” said Mara Warwick, World Bank Country Director.
According to her, currently only 57 per cent of citizens of a median age of 17 years have access to electricity, insisting that investments in energy are urgently needed to contribute to improved human capital, remove constraints to more and better jobs, and enhance productivity.
The WB Senior Economist and Team Leader, Mr Kabir Malik said the investments and institutional strengthening activities supported under the project will help lay the foundations for the future scale-up of renewable energy generation through private sector participation in Zanzibar.
“ZESTA supports investments in renewable energy generation, electricity grid strengthening, and energy access scale-up to support Zanzibar’s targets towards universal electricity access and renewable energy development,” he said.
For his part, the WB Senior Energy Specialist and team leader Mbuso Gwafila said the investment will also contribute to broader gender and climate resilience related goals.
“The project will support improved career opportunities for women in the Zanzibar energy sector, and help in strengthening climate resilience both in terms of mitigation and adaptation, supporting Zanzibar’s Climate Change Strategy,” he noted.
ZESTA, the first engagement by the World Bank in the Zanzibar energy sector, is to be implemented by the Ministry of Water, Energy and Minerals, the Zanzibar Electricity Corporation (ZECO) and the Zanzibar Utilities Regulatory Authority.
It has been structured in three components such as renewable energy and storage infrastructure development that will develop the island’s first grid- scale renewable energy power generation plant and battery storage infrastructure.
The scheme will also see publicly owned solar photovoltaic plants help to meet the growing electricity demand in the near term, while paving way for future scale-up of renewable energy power generation, including through private sector participation.
Another aspect to be covered includes grid modernization and access scale-up that aims to address key constraints in the electricity grid in Unguja and will finance investments.
This is in line with the latest ZECO Electrification Master Plan that focuses on enabling the increased penetration of variable renewable energy generation, improving reliability of power supply, reducing losses, and expanding electricity access to previously unserved communities and vulnerable households.
“There will also be institutional strengthening and project implementation support that will help build capacity for sector modernisation and growth, and also ensure that the implementing agencies have adequate capacity to facilitate successful and sustainable operation of the investments,” read part of the statement.