By Business Insider Reporter
Tanzania is set to benefit from US$2 million in British funding aimed at improving the investment environment for renewable energy, as a wider US$6 million initiative seeks to expand electricity trade and strengthen power security across Eastern Africa.
The funding, announced at the COP31 climate conference on November 11, 2026, is expected to help address technical, legal, regulatory and commercial constraints that have limited greater private-sector participation in Tanzania’s renewable energy generation and transmission.
“The UK is working with the World Bank Group and the Government of Tanzania to establish the conditions necessary to attract more private capital into the country’s clean energy sector, leveraging its abundant renewable energy resources to support economic growth,” the British High Commission said in a presser on the funding.
The initiative comes at a time when reliable and affordable electricity remains critical to Tanzania’s industrialisation, business competitiveness and broader economic transformation ambitions.
By strengthening the framework for private investment, the programme seeks to create opportunities for businesses and investors to participate more actively in renewable power generation and transmission, while helping improve electricity reliability for households and enterprises.
The announcement was made during the Global Clean Power Alliance (GCPA) Finance Mission event at the COP31 UK Pavilion, marking one year since the alliance was launched in partnership with Brazil at COP30.
Tanzania was among the first African countries to join the alliance, signalling its commitment to expanding clean power production and accelerating the transition towards more sustainable energy systems.
Regional electricity market
Beyond Tanzania’s national energy investment agenda, the UK is committing a further US$4 million, in partnership with the World Bank Group, to develop regional electricity trade through the RETRADE-East Africa initiative.
The programme is designed to strengthen cross-border electricity trade, enabling participating countries, including Tanzania, to access potentially lower-cost electricity from regional markets and improve the resilience of their power systems.
Greater regional electricity connectivity could provide an additional source of supply when individual countries experience electricity shortages, disruptions or climate-related shocks, while creating opportunities for more efficient utilisation of available generation capacity across national borders.
For Tanzania, stronger regional electricity trade could complement domestic investments in power generation and transmission, offering greater flexibility in managing electricity supply and demand.
The combined US$6 million commitment therefore addresses two interconnected priorities: improving the conditions for private investment in domestic clean energy infrastructure and strengthening the regional electricity market.
British High Commissioner to Tanzania Marianne Young said reliable and affordable electricity was fundamental to the country’s economic growth.
“By creating the right conditions for private investment, we can help Tanzania make better use of its clean energy resources and build a more resilient power system,” she said.
She added that the UK was proud to support Tanzania and its regional partners in developing a more connected electricity market capable of attracting investment, supporting businesses and expanding economic opportunities across Eastern Africa. The funding reinforces the UK-Tanzania clean energy partnership, with the two countries working alongside international development partners to strengthen the institutional and investment foundations needed to expand renewable energy and improve electricity access.
