World Bank Group member IFC has launched a $5 million program to increase access to energy in Tanzania by developing a market for mini-grids. The initiative aims to bring affordable, off-grid renewable energy to households and businesses in rural Tanzania.

IFC will work with project developers in Tanzania to promote commercially viable mini-grid business models, and will advise banks and financial institutions on how to extend long term finance to mini-grid developers, it said in a statement.

Tanzania has been selected as one of the first countries to test the concept of using small-scale renewable energy production sources under a new program, called the Scaling-up Renewable Energy in Low Income Countries Program. In Tanzania, it aims to help diversify energy production away from fossil fuel based sources.

Mini-grids are technically and commercially viable for high-density populations that live outside the reach of the national electricity grid. The Tanzanian government estimates that about half of the country’s rural population could be served by off-grid options in a cost-effective manner. Mini-grids could provide access to electricity for 9.1 million people in Tanzania.