The Norwegian government has decided to allocate NOK 700 million ($122 million) to the Tanzanian rural energy fund.

Norway announced this last week after signing an agreement with Tanzania in Oslo to provide the funding for a four-year period.  Tanzania was represented by its Minister of Energy and Minerals Sospeter Muhongo

“This funding will be channelled to a rural energy fund in Tanzania that will give people in rural areas access to electricity, Norway’s Foreign Affairs Ministry said in a statement.

It is believed that eight out of ten people in Tanzania live in rural areas and of these people, only 6 percent have access to modern forms of energy.

“Providing electricity in rural areas is a way of giving the majority of the population in Tanzania the freedom to choose not to use paraffin, diesel and other less reliable energy sources that are damaging to health,” said Norwegian Minister of International Development Heikki Eidsvoll Holmås.

Norway will now be the biggest single donor to the fund which will be managed by the Rural Energy Agency (REA).

Sweden, the World Bank and the EU are also supporting the fund.