The Infrastructure Development Bank of Zimbabwe intends to invest as much as $200 million in developing “green” projects in the renewable energy with combined generation capacity of about 130 megawatts, IDBZ director (Infrastructure projects) Desmond Matete has said.
The projects, at different stages of feasibility studies and preparation will include mini hydro power and solar based power projects, Matete told delegates at the green investment catalyst round table held in Victoria Fall this week.
The conference brought together climate change experts, local, regional and international development finance institutions as well as international agencies who deliberated on how Zimbabwe could come up with a framework to enable it to issue financial instruments to raise funding for projects with less negative impact to the climate to help the country partly meet its greenhouse emission target reduction by 2030.
The country is a signatory to the Paris climate change accord agreed in 2015 which largely seeks to hold the increase of the global average temperature to below 2 degrees Celsius. Studies have shown that Zimbabwe is emitting an estimated 26 000 giga grammes of carbon dioxide, equivalent to 0.05 of the global emissions.
Zimbabwe submitted a conditional 33 percent energy sector per capita greenhouse gas emission reduction target. The submission was conditional on the means of implementation namely technology development and transfer, relevant training and financial support. The country needs about $90 billion to meet its climate goals.
“The bank’s green energy projects pipe line require funding in the range of between $130 million and $200 million,” said Matete. “The upper range assumes full implementation of the rooftop solar energy projects.”
The projects that the bank is working on include Osborne mini hydro power station in Manicaland Province to be financed to the tune of $7,7 million, Odzani mini hydro power plant which requires an estimated $6,4 million, roof top energy projects ($26 million and Rufaro solar farm in Marondera ($52 million.)
“The bank appraises projects in modular format with the Environmental and Social Impact Assessment being one of the key modules. Through this module, projects compliance to the Environmental management Act will be interrogated and appropriate recommendations adopted,” added said Matete.
The existing green projects IDBZ has participated in include the funding of expansion of Kariba South Hydro Power Station and the roll out of prepaid electricity metres which has resulted in energy savings of over 200 megawatts.
Matete said the county was at a stage where investors were ready to come on board and partner in infrastructure development agenda. This could only be realized provided resources were directed towards developing robust projects pipelines which were bankable especially for the energy sector where consumer demand far outstrips available generation and on-grid capacity thereby stifling economic growth.
To this end, the IDBZ took a bold step to set up a window called the project preparation and development fund (PPDF), which finances early stage development processes for projects including bankable feasibility studies to support the investment case for each of the projects targeted for promotion to investors.
“This fund requires to grow to support significant infrastructure projects of scale which are also environmentally friendly as the bank champions infrastructure development in the key areas of energy, transport water and sanitation, housing and Information, Communication and Technology,” said Matete
The approach by the IDBZ resonates with the recent establishment of the Joint Ventures unit under the Ministry of Finance and Economic Development where joint venture and public private partnership projects submitted for approval should be supported by feasibility studies reports as a pre-condition to government supporting their implementation.