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Nqobile Bhebhe, [email protected]

ZIMBABWE has laid a solid foundation to accelerate significant inroads in developing a resilient and sustainable renewable energy sector, by taking the lead to expedite investments in the sector and formulate policies to ensure energy security and sufficiency in the country.

Authorities and players in the sector are of the firm belief that for the country to achieve universal access to clean, sustainable, reliable, and affordable energy by 2030, there is a need to have robust policy interventions and mechanisms to promote renewable energy, energy efficiency and energy conservation.

One such policy intervention is the National Energy Efficiency Policy, which according to Energy and Power Development Minister, Edgar Moyo, has been sent to Cabinet for debate, possible approval and adoption.

Minister Edgar Moyo

More importantly, during the recently held three-day International Renewable Energy Conference Expo 2024, held in Victoria Falls under the theme, “Building a Sustainable Energy Future”, the Government guaranteed the bankability of 10 independent power producer (IPP) projects with the potential to generate a combined 271 megawatts (MW) in renewable energy. This will be executed under the Government Project Support Agreement (GPSA), which has a pool of close to 40 licensed players with guaranteed implementation.  

Under a GPSA, IPPs will be guaranteed an economic tariff, while the Reserve Bank of Zimbabwe will ensure that they can convert their earnings to foreign currency and be able to transfer it. The GPSA also carries a power purchase agreement with Zesa.

Zimbabwe, seeking to boost renewable energy capacity to 1 100 MW or 16,5 percent of overall electricity supply by 2025 and 2 100 MW or 26,5 percent of total supplies by 2030 in line with climate goals, needs huge capital inflows to reach the target.

The accelerated focus on renewables comes as the country seeks to lessen its reliance on energy imports and improve access to electricity and meet growing demand for power. The financial guarantee scheme for IPPs is meant to unlock critical funding for renewable energy projects, by mitigating risk for investors and paving the way for a more sustainable and reliable energy future for Zimbabwe. The 10 IPPs are De Green Rhino Solar (50MW), Mutorashanga Indo Africa Solar with a capacity of 10MW, Guruve Solar Energy Project (5,5MW), Equinox Solar (10MW), Murombedzi Solar (10,5MW), Great Zimbabwe Mini Hydro (5MW), Par Valley Energy (50MW), Acacia Energy (50MW), Energywise Vungu Solar (30MW) and AF Power 50MW.

The GPSA is intended to guarantee a cost-reflective tariff uptake of power and offshore repatriation of funds by investors. In a joint press statement issued at the conference, Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube and Minister Moyo, said  the selected companies will benefit from a capped tariff of US$0,9 cents per kilowatt for solar energy.

“The Ministry of Finance, Economic Development and Investment Promotion and Energy and Power Development jointly announce that the above companies met the criteria.

“The selected companies will benefit from a capped tariff of US$0,9 cents per kilowatt for solar energy regardless of capacity due to drop in solar technology prices in late 2023,” they said in a joint statement.

The communiqué further states that the 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 off-take power, which will enable seamless servicing of the obligations.

“We are delighted to inform that the IPPs will be issued with the Government Project Support Agreement for their review in preparation for the signature within the next two weeks,” they added.

President Mnangagwa, represented by Vice President, Dr Constantino Chiwenga, told delegates that the country is open for more investors and partners to take up opportunities to promote new energy technologies and smart off-grid systems across the country.

Dr Constantino Chiwenga

“Our statistics reflect that Zimbabwe is making steady progress in stabilising and increasing total energy output. However, more work must be done to ensure consistent access to clean energy across our provinces, including in rural communities,” he said.

Governments’ actions seem to have unlocked funding from development partners.  For instance, at the conference, United Nation’s Resident and Humanitarian Coordinator Mr Edward Kallon announced a US$45 million pioneering initiative to spur investments in renewable energy.

“Today marks a significant milestone in our collective endeavours as I proudly announce that the United Nations, in collaboration with your administration — the Government of Zimbabwe, is embarking on a pioneering initiative to spur investments in renewable energy,” he said. “By promoting the adoption of renewable energy sources, the United Nations supports the Government of Zimbabwe in mitigating climate change, improving energy access, and driving socio-economic progress. Thus, furthering your Government’s mission of establishing a more sustainable and equitable future for all Zimbabweans.”

He noted that the United Nations’ establishment of a Renewable Energy Fund (REF), is designed to mobilise resources and facilitate investments in renewable energy solutions across Zimbabwe.

“With an initial investment of US$45 million, this fund signifies a concrete commitment to driving sustainable development and progress in our nation,” he said.

“I am pleased to announce that Old Mutual has been entrusted with managing this renewable energy fund, leveraging their expertise and dedication to sustainable finance.

“Together, we will harness the power of partnerships to unlock the transformative potential of renewable energy and pave the way for a brighter future.

“I express deep appreciation for the initial capital received from the Multi-Partner Trust Fund (MPTF) through the UN SDG Fund secretariat in New York amounting to US$10 million.”

Old Mutual Zimbabwe (OMZ) has committed to availing US$10 million into the renewable energy fund.

Group chief financial officer, Mr Takura Mudekunye, said the renewable energy fund was meant to be a platform for mobilising resources and facilitating renewable energy solutions across Zimbabwe.

“The fund will be launched onto the market soon,” he said.

He noted that to date, they have invested in six renewable energy projects with a combined generation capacity of 42 megawatts (MW).

“Out of the six projects, we are already feeding 10MW into the national grid with an additional 32MW coming on stream by the middle of this year.

“These investments are part of our contributions towards the National Development Strategy One to develop a prosperously empowered upper middle-income society by 2030, as well as contributions towards ongoing efforts by Zimbabwe to meet its sustainable development goals by 2030.”

With a great show of commitment by development partners and the private sector, Minister Moyo told delegates that the country has vast renewable energy resources, whose potential remains underutilised.

He stressed the need to have robust policy interventions and mechanisms to promote renewable energy, energy efficiency and energy conservation.

He said his ministry will strive to seek innovative ways of promoting the exploitation of these resources firmly guided by the vision to achieve universal access to sustainable and modern energy in Zimbabwe by 2030.

 “If Africa and indeed Zimbabwe,the goal is to make significant strides towards achieving universal access to clean, sustainable, reliable and affordable energy by 2030, it is important for us to have robust policy interventions and mechanisms to promote renewable energy, energy efficiency and energy conservation.

“We are glad that we have tendered our National Energy Efficiency Policy to Cabinet for approval and adoption,” he said.

Players in the renewable energy sector have welcomed the financial guarantee scheme for IPPs.

Reflecting on the GPSA, De Green Rhino CEO, Mr Francis Gogwe, said  the financial guarantee scheme is a game-changer for the country’s energy sector. He said the agreement’s purpose is to de-risk energy projects from risks that may not be mitigated by the utility, ZETDC as the major off-taker. Such risks, he said, will be passed on to the government through the Ministry of Finance and Economic Development.