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Nathan Muchemwa
Herald Correspondent
Achieving energy security continues to be a pressing issue in Africa.
Electric power is a key input into mining, agro-processing, industry and transport, and as such is arguably the most important driver of economic growth.
Load shedding and energy rationing are now the norm in some African countries.
Power shortages have affected productivity and many companies have been forced to lay off workers.
Businesses have shown considerable ingenuity and resilience to keep going, revised production methods, for example, have included factories running short shifts overnight when electricity is available. However, such solutions are not sustainable.
In 2002, Zimbabwe initiated market-based power sector reforms, with the revision of the 1985 Electricity Act which was previously revised in 1996.
However, before the Act was amended in 2002 to allow for partial liberalisation of the sector, there were two attempts at partial privatisation, which include the attempted privatisation and expansion of ZESA’s Hwange coal-fired power station and the setting up of a new coal-fired power station at Gokwe North.
The former was intended as a joint venture between the YTL Corporation of Malaysia and ZESA, while the latter involved the UK-based multinational Rio Tinto Corporation.
In partially liberalising the sector through encouraging private participation, introducing regulation and competition and restructuring the utility, reformers hoped to improve the quantity and quality of supply as well as to increase electricity access, to support economic growth and development.
Now, more than two decades since the inception of reforms, Zimbabwe continues to move forward in improving power generation supply.
Critically, installed generation capacity remains obstinately below demand, the quality and reliability of electricity services are however increasing, and access remains a priority. However, current reports state that the National Development Strategy 1 (NDS-1) 2020-2025, Zimbabwe’s new economic blueprint aims at ensuring improved energy supply and to turn Zimbabwe into an upper-middle income economy by 2030.
The objective is to increase power supply from the current installed capacity of 2317MW to 3467 MW by the year 2025 and construction of additional 280km of transmission and distribution network by 2025
Moreover, the Sustainable Goal number 7 (SDG7) requires that Zimbabwe increase the use of renewable energy and double the improvement in energy efficiency by 2030.
With the synchronisation of the Hwange Power Station Unit 7 in to the national grid, Zimbabwe will witness an improvement in power supply as the current generation stands at 709MW.
Zimbabwe’s electricity legal framework is among the most liberalised in Africa.
In terms of the Electricity Licensing Regulations 2008 Statutory Instrument 103 of 2008 companies incorporated or registered in terms of the Companies Act [24:03] can apply for generation, transmission and bulk supply or distribution and retail licenses thus enabling an IPP to sell directly to the end-user.
Growing demand and limited state resource mobilisation has seen the emergence of robust alternative power providers such as IPPs.
This in turn has attracted Development Finance Institutions (DFIs) and other multilateral partners.
There is now a clear understanding of the importance and relevance of private and quasi private financiers in the development of power projects and Zimbabwe is certainly no exception.
Many African countries have been undergoing reforms partially targeting restructuring the electricity sector to improve performance so as to increase access to electricity, reduce technical and financial losses and attract private sector investment.
The changes have mainly been two-pronged, namely structural and ownership changes.
The structural changes have concentrated on the functional unbundling of the utilities, to enhance transparency while ownership changes were mainly designed to increase private sector investment and involvement.
In practice reforms in most African countries have been largely designed to facilitate foreign private investors.
Although local private investors, particularly SMEs could be effective in improving electricity access, most reforms have not attempted to involve local SMEs.
One of the options for involving local private investors is to outsource some of the activities/services of the power utility to small and medium-scale enterprises (SME).
On the other hand, the Second Republic has declared to leave no one and no place behind, thus the establishment of solar grids all over the country has come in handy in as much as relieving pressure on the national grid is concerned.
This dovetails with the devolution and decentralisation policy, which the Second Republic has enforced by putting in measures in place to ensure that the whole country receives electricity including those in remote areas; through the Rural Electrification Agency (REA). Come 2025, the NDS1 would have paid dividend in as much as making Zimbabwe an upper middle income society is concerned.
Furthermore, a US$13 billion industrial energy hub has been established in Mapinga, Mashonaland West province.
The energy hub is poised to produce lithium batteries which will be sold in Zimbabwe and abroad. The setting up of the energy hub would be in phases, which would lead to the creation of at least 25 000 jobs for the locals.
Phase One will see the setting up of a 300 Megawatt power station and phase 2 will see the setting up of value addition facilities where lithium batteries and solar panels will be manufactured.
In line with Vision 2030, the establishment of the lithium battery industry will go a long way in aiding towards the realisation of a US$12 billion mining economy by 2023.
This will also ensure that mining companies pay for their royalties using minerals which will also have an effect on the realisation of Vision 2030.
Moreover, the discovery of lithium in the country is set to boost the energy sector.
Recently, a lithium mine was established through a joint venture between the Zimbabwe Mining Development Corporation (ZMDC) and Pude Technology, a Chinese company and is expected to open full scale by June 2023.
The joint venture was consummated at an equal shareholding of 50 percent each.
ZMDC revealed that the joint venture had so far raised approximately US$10 million towards the re-opening of the mine. However, it was highlighted that to fully constitute operations at the mine, the joint venture agreed to raise approximately US$100 million.
In line with Government dictates, the mine will open with a lithium processing plant mounted at the mine. However, the processing plant is yet to be shipped from China, though preparatory developments have already started on the foundation on which the plant will be mounted.
It is thus important to note that the energy sector is not limited to hydro and solar energy alone, but that, the discovery of rare metals and lithium is another source that is expected to boost availability and access to energy to very citizen and industrial hub. Zimbabwe is set to be an energy hub capable of exporting electricity to neighbouring countries.
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