10 new IPPs to generate 271MW
ZIMBABWE has licenced 10 more independent power producers (IPPs) to start generating 271MW of electricity in the next 12 to 24 months under the Government project support agreement which now holds close to 40 private licence holders with guaranteed implementation.
As of last Friday, Zimbabwe was producing 1 538MW combined power output, with Hwange Thermal Station leading at 914MW, followed by Kariba Hydro at 563MW and IPPs at 61MW.
The coming in of the newly licenced IPPs is expected to further boost domestic power generation so it can keep up with the economic growth.
This emerged during the recent International Renewable Energy Conference Expo 2024 in Victoria Falls, where 10 of these IPPs were given the GPSA guarantees and are expected to start generating and selling to the national grid within a year.
The 10 IPPs are: Mutorashanga Indo Africa Solar with a capacity of 10MW, Guruve Solar Energy Project 5.5MW, De Green Rhino Solar 50MW, Equinox Solar 10MW, Murombedzi Solar 10.5MW, Great Zimbabwe Mini Hydro 5MW, Par Valley Energy 50MW, Acacia Energy 50, Energywise Vungu Solar 30MW and AF Power 50MW.
The country is aggressively transforming its energy sector with new capacity to concentrate on clean energy sources in line with global climate change mitigation approaches, while creating a solid base for powering its industrialisation drive to meet Vision 2030 targets.
In a joint statement, Finance, Economic
Development and Investment Promotion Minister Professor Mthuli Ncube and Energy and Power Development Minister Edgar Moyo, said the focus was on solar energy for now with other renewables to follow later.
The two ministries in December 2022 jointly announced Government’s willingness to expedite investment in the renewable energy sector in order to ensure energy security and adequate supplies in the country.
The Government has since engaged Africa Legal Support Facility and developed a standardised implementation agreement, the Government project support agreement, which will guarantee bankability of investments in the renewable energy sector.
The support agreement is intended to provide comfort through guaranteeing a cost-reflective tariff, uptake of power, and offshore repatriation of funds by investors.
Government also formed an evaluation technical committee to select those IPPs that can be issued with these support agreements.
Qualifying IPPs basically need to be building their power station, about to start building or have at least shown proof of holding the land required and having the finance in hand.
“The selected companies will be benefit from a capped tariff of US$9 cents per kilowatt for solar energy regardless of capacity due to drop in solar technology prices in late 2023. Government is willing to support all the local IPPs through a back-to-back liquidity support structure whereby the IPPs can have an arrangement with relevant exporting private off-takers to offtake power, which will enable seamless servicing of the obligations,” reads the statement.
“IPPs will be issued with the Government project support agreement for their review in preparation for the signature within the next two weeks.”
More IPPs will go a long way in ensuring that local supplies are more secure and that they are growing in line with the expanding economy.
Speaking in a panel discussion at the 56th United Nations Economic Commission for Africa (UNECA) Conference of Finance Ministers, which is underway here, head of aid and debt management in the Ministry of Finance Mr Andrew Bvumbe said Zimbabwe was in deficit in terms of power generation, hence the Government has made a deliberate policy to focus on solar.
“In our new independent power producers approach we have licenced 38 of them through Zera. When we licensed those 38 there was lack of coordination and we had an influx of investors seeking guarantees,” he said.
“So, we needed a standardised approach as a template and we approached Africa Legal and we agreed on this important Government Project Support Agreement, which lays out all issue in one documents.
“During this week here in Victoria Falls we licenced 10 projects, which were signed with a total of 271MW that in the next 12 to 24 months will be coming into the grid. The critical issue is de-risking and we are in a good stand to get these projects implemented using this standardised template.”
The Government is guided by the vision to achieve universal access to sustainable and modern energy in Zimbabwe by 2030.