daniel chigunwe
Nqobile Bhebhe
Parliamentary portfolio committee on energy and power development has said the sector is seriously hamstrung by delays in payments of project loans instalments such as the China Exim-Bank, high debt overhang and poor credibility of Zimbabwe Electricity Transmission and Distribution Company (ZETDC) as an off-taker due to sub-economic tariff and poor revenue collection.
This was disclosed at the 2025 pre-budget seminar held in Bulawayo last week.
According to the presentation, delays in cash releases for payment to contractors for works completed, foreign currency challenges for the importation of critical machinery, equipment and materials needed and high debt overhang is negatively affecting the sector.
Another challenge noted was the exchange rate volatility and price increases.
“The project budgets were eroded by inflation and exchange rate depreciation as the projects are denominated in United States dollars whilst the budget is denominated in ZWL,” said the committee.
High cost of borrowing due to some perceived country risks for Independent Power Producers (IPPs) and state utilities was another factor cited.
Energy is a key enabler to the acceleration of the country’s modernisation and industrialisation agenda as well as sustainable socio-economic growth.
To address perennial power shortages in the country, the Government is undertaking several electricity generation projects, most of which are funded by extra-budgetary funds, loans and the private sector.
In line with NDS1, providing reliable and low-cost energy access is in line with the Government’s intention to provide economic growth and stability.
According to the Government, the country’s energy needs by 2025 will be around 3 500MW.
The Government is seeking to reach the 2025 targets by mixing fossil energy and green energy projects, with the private sector playing a leading role.
However, the country is under-going crippling power outages, posing a threat to economic growth as industries struggle optimise operations.
On 2025 bids and allocations, the committee said the expenditure ceiling of ZiG136.7 million shows a decline from the previous allocation of ZiG192 million yet energy and power development remains crucial in fighting load shedding in the country.
The current expenditure ceiling shows a 52.89 percent decline from the ministry’s total bid.
Turning to the 2024 budget performance, the committee notes that the original budget was ZiG 161,091,365.
The ministry later received ZiG 31,215,400 from the unallocated reserves resulting in a revised provision of ZiG 192,306,765.
Total amount disbursed to the ministry was ZiG 69,547,713 and expenditure as at September 2024 stood at ZiG 82,085129.
The report further adds that some of the line items had exhausted their budgets after the change over from ZWL to ZIG.
“The low expenditure is due to the fact that the releases required by the ministry are not being honoured by the treasury and in some cases less than what they required is disbursed. Part of the funds that were received from the unallocated reserves went to ZETDC to cater for the SADC event, the payment of the legacy debt to ZRA as well as funding to Hwange 7 and 8.”
The committee noted that “Energy should be prioritised during budget allocation as a key economic enabler for the attainment of vision 2030. It is vital treasury allocates necessary resources and are disbursed timeously to the ministry to complete capital projects to ensure there is energy sufficiency in the country.
“There is need for alignment between ministry’s bid and treasury allocation. In this regard, the committee advocates for timeous releases and adequate allocation from fiscus.”
Bongani Ndlovu