Golden Sibanda in VICTORIA FALLS
Zimbabwe requires about $12 billion to resolve its power deficit and meet future needs of a vibrant industry and economy with a quarter of the funding needed to electrify rural areas.
But the country first needs to address investors’ concerns around policy consistency, economic stability and give assurance that they would be able to repatriate dividends from equity investment and repayments on loans extended.
Zimbabwe Energy Regulatory Authority chief executive Gloria Magombo said the country was only producing 75 percent of its current electricity requirements while as much as 60 percent of the country’s 13 million population had no access to power.
Demand for power in Zimbabwe stands at about 1 600MW, but current production is just over 1 000MW. The deficit is covered by imports from the region. The highest demand for power was 2 000MW, in 1999.
To resolve a crippling power deficit, which has Zimbabwe spending over $5 million weekly on imports, against a backlog of over nearly $180 million for essential external payments; private investors are allowed to invest in power.
The energy regulator said it had since licensed 30 new independent power producers intending to build new power plants with potential to generate 6 786 megawatts, to complement projects Government is working on. Fifteen of the projects are solar plants with capacity for 734MW.
“We need investors to come in, bring equity and technical know-how on the implementation of projects. So there are issues around how we can support these projects to ensure that they are bankable and we get partners to come and develop the projects with us,” Eng Magombo said.
To secure investments Eng Magombo said there was need to address reservations of investors who are interested in investing in energy production.
“As such, we are looking at $12 billion, which is required as investment into the sector; not just for us to meet the requirements of industry, but for all other sectors of the economy, which require electricity,” she added.
Eng Magombo said this while addressing the Confederation of Zimbabwe Industries annual congress, which started on Wednesday and ends today.
Eng Magombo pointed out that about $3,2 billion was required to bring rural schools, households and other productive activities on to the power.
Zimbabwe’s last major investments were in the 920MW Hwange Power Station, completed around 1987 and Kariba South, which was done in 1957. Hwange is now producing a fraction of its capacity due advanced age.
Government has awarded contracts to Sino Hydro for extension of generation capacity at 750MW Kariba South Station and 600MW expansion at Hwange. A joint venture effort is also being pursued with Zambia, for Batoka Gorge hydro project, which will generate over 2 300MW.
Eng Magombo said that the region experienced an electricity deficit of up to 5 000MW three years ago, but now has excess of about 1 000MW largely due to the investments that South Africa has put into renewable energy.