Announcing the financing initiative on Saturday in Dar es Salaam, CEO Ruth Zaipuna said the loans will carry an interest rate of 1% per month, equivalent to an annual credit cost of 12%, to make them affordable and attractive to borrowers.
The maximum loan an individual borrower can access from any NMB branch nationwide is TZS 1 billion, the seasoned banker told Deputy Premier Dotto Biteko, who presided over the inauguration of the novel lending package.
Lauding the lender backing the government’s cleaning cooking agenda, Dr Biteko said the low-cost loans are a timely intervention to support national efforts to transition majority people away from harmful and polluting fuels.
He stated the soft loans will be crucial in promoting the widespread availability of sustainable alternatives, pointing out that official figures show that only 16% of households in Tanzania were currently using clean cooking sources.
"This special credit facility being officially launched by NMB Bank today marks a significant milestone for the renewable energy sector. It is a timely financing initiative that aligns perfectly with President Dr Samia Suluhu Hassan's vision of transforming Tanzania into a model nation with universal access to affordable, reliable, and sustainable energy sources," Dr Biteko, who also serves as the Minister of Energy, remarked.
Ms Zaipuna said the loans are set at a highly competitive interest rate to not only make them affordable and user-friendly but also ensure they accelerate distribution of clean energy solutions and enable many Tanzanians to adopt them.
She further noted that the primary beneficiaries of this financing will be distributors and agents of gas cylinders and stoves, which currently the most accessible and environmentally friendly energy solutions available in the market.
“As the leading and most successful bank in Tanzania, NMB recognizes our responsibility to join hands with our government in implementing the National Clean Cooking Energy Strategy, which seeks to ensure affordable, accessible, sustainable, and modern energy for all,” Ms Zaipuna noted.
“We believe this fund will significantly contribute to our nation's goal of increasing clean cooking energy usage, thereby promoting environmental conservation, improving health and community welfare, boosting the economy, and advancing mostly UN Sustainable Development Goals 7.”
The ambitious clean cooking energy blueprint, launched in May 2024, aims to achieve 80% adoption of safe fuels among Tanzanians within a decade. It also seeks to deliver significant eco-friendly benefits for the country, including fostering opportunities for sustainable growth.
Dr Biteko stated that significant progress has since been made in promoting the use of clean cooking energy, including allocating subsidies exceeding TZS 36.64 billion to select public institutions serving over 100 people daily, enabling them to comply with the ban on firewood and charcoal usage.
The government, through the Rural Energy Agency (REA), has also distributed some 110,000 gas cylinders to several regions across the country. Additionally, the Ministry of Energy is continuing with a plan to distribute about 452,445 subsidized gas cylinders nationwide.
"Beyond gas cylinders, the government is in the final stages of rolling out the distribution of over 200,000 subsidized energy-efficient stoves," the Deputy Premier stated, adding that President Samia commended the pivotal role the NMB loan will play in advancing the government’s Clean Cooking Energy agenda.
Speaking earlier, Finance Minister Mwigulu Nchemba highlighted that the Head of State is also actively championing the agenda on the international stage, where her efforts have been both impactful and widely acknowledged.
CEO Zaipuna said the significance of this agenda locally and internationally is driven by increasing environmental degradation, climate change, and health risks resulting from the use of unclean cooking energy.
She emphasized that the data and the reality on the ground underscore the urgent need for all stakeholders to collaborate with governments and communities to tackle Africa's lack of access to clean cooking energy.
This includes the tragic loss of over 600,000 women and children annually from smoke-related illnesses caused by unclean energy, with Tanzania alone accounting for more than 33,000 of these deaths each year.
To mitigate these fatalities and other harmful effects of unclean energy, the lender will support its financing efforts with a widespread awareness campaign on the importance of clean cooking. This initiative will leverage NMB’s Village Day platform, commonly used to deliver financial education in rural areas.
“Rural areas require this clean cooking education the most due to their heavy reliance on firewood and charcoal for cooking. Our partners at Taifa Gas have agreed to collaborate with us in spreading this education to over 2,000 villages nationwide this year,” CEO Zaipuna said.
The lender has also established partnerships to promote clean energy adoption, including a campaign encouraging the use of gas stoves. As part of this initiative, NMB Bank customers can enjoy a 10% discount when purchasing Oryx gas through agents using an NMB Mastercard.
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