Zimbabwe’s push for shift to renewable
Financ ing of Zimbabwe's renewable energy projects by independent power producers (IPPs) remains the key challenge in getting them off the ground, it has emerged.
From last Tuesday to Friday, The Standard in partnership with the Energy and Power Development ministry hosted the third edition of the International Renewable Energy Conference and Expo in Victoria Falls to promote renewable energy usage in the country.
Climate change and shortages of foreign currency to import electricity have left the country unable to continue relying on hydropower and thermal energy, the two main sources of electricity.
“Renewable energy is no longer a matter of choice, but of necessity given the negative effects of climate change,” said President Emmerson Mnangagwa, on Friday as the curtain came down on the well subscribed conference.
“This third edition of the conference must result in concrete recommendations and models on ways to harness the opportunities, which exist in the renewable energy sector in our country.”
Zimbabwe has a power deficit of between 1 200 megawatts (MW) and 1 600MW, according to independent estimates.
Officially, the country has a deficit of 1 000MW which is based on demand hitting 2 370MW by year end, amid a current power generation of 1 370MW.
According to the National Renewable Energy Policy (NREP) launched in March 2020, by Mnangagwa, Zimbabwe is now banking on IPPs to fill in the power deficit void.
The government says the country can generate up to 1 872MW worth of power from renewable energy sources.
Solar can generate 600MW as Zimbabwe has a solar potential of 16 to 20 MJ/m2/day, geothermal (50MW), biomass (1 000MW), small hydro (120MW), and wind (100MW), according to the Zimbabwe Energy Council’s research.
Yet, research from the Energy and Power Development ministry revealed that more than 90 licenses have been issued to renewable energy IPPs with a potential to add 7 000MW to the national grid.
However, of that number, only 20 licensees have operational projects.
Energy and Power Development minister Soda Zhemu said the major reason behind the failure by IPPs to start their projects on time was that they did not have bankable projects.
“Some do not exhibit the potential to obtain funding for their projects and I think you have heard from the presentation by AfDB (African Development Bank), especially when they indicated that some are even failing to come up bankable project proposals with which has to be done by the project developer when they are looking for funding,” Zhemu told The Standard on the sidelines of the conference.
“They are coming up with shoddy project proposals, which cannot attract funders to be involved in those projects.”
He said licence holders were basically failing to come up with bankable projects that can convince funders to put their money.
IPPs apply for licences through the Zimbabwe Energy Regulatory
Authority (Zera) and they must show that they have long-term funding to sustain their projects.
“I think there is a need for those (the 70 IPPs) to explain why they are struggling.
“There is an issue of revealing financial closure, which avails the funding for the project to go through.
“They haven’t gotten to that stage yet.
“The main reason, which is sort of inhibiting this is to do with the issues which are now being addressed by a framework which is being done by the government,” Zera CEO Edington Mazambani said.
“Issues to do with government implementation agreements, it’s like a government guarantee to the implementation of the project.
“Issues to do with currency risk — that you are going to invest in US dollars where the tariff is set in United States dollars, but it’s payable in local currency at the exchange rate ruling at the day of payment.
“The IPPs are not assured of accessing foreign currency in terms of loan repayment and profit repatriation. Those are the issues that are going to be addressed by