Lack of reliable access to electricity is a significant barrier to economic development and job creation in Tanzania. This ‘Inside story on climate compatible development’ by the Climate and Development Knowledge Network (CDKN) explores Tanzania’s Small Power Projects (SPP) programme. The programme was designed by the Government of Tanzania – with very limited financial resources – to support renewable energy deployment. As a result, decentralised renewable energy solutions are contributing to Tanzania’s climate compatible development by: supporting economic development through improved access to reliable electricity; reducing greenhouse gas emissions; and lessening vulnerability to fossil fuel price shocks and to drought-related hydropower shortages. Tanzania’s renewable energy policymaking and implementation has benefitted from intensive South-South exchange with Thailand and Sri Lanka.