Funding gap frustrates independent power projects

Oliver Kazunga, Senior Business Reporter
ENERGY and Power Development Minister, Zhemu Soda, says a number of planned electricity generation projects by licensed Independent Power Producers (IPPs) are in limbo due to funding constraints.

Since 2010, the Zimbabwe Energy Regulatory Authority (Zera) has licensed more than 70 IPPs to establish electricity generation plants across the country but the investments have failed to take off.

The licensed IPPs have promised to produce more than 6 000MW combined but the projects are only producing about 135MW.

Responding to questions in Parliament on Wednesday, Minister Soda said after licensing by Zera, the bulk of the IPPs went to the market to scout for funding from potential investors but to no avail.

“Up to now not many of them (IPPs) have produced anything. Some of them were issued with these licences more than five years ago but are yet to establish the plants. What has been happening is that the prospectors came and applied for licences without funding. After they had acquired licences, they started to look for investors to assist them but most of them failed to attract investors,” he said.

Minister Soda said this is why most of the IPPs have failed to implement the promised power generation projects.

Zimbabwe requires an additional 9 000MW to support economic activities that will drive the country towards achieving an upper middle-income economy by 2030.

The country’s demand for power hovers around 2 000MW. However, due to ageing equipment, existing power plants are generating far below the national requirement.

It is hoped that the IPPs, some of which are companies in various sectors of the economy, will produce electricity to meet their individual operational requirements while excess power would be fed into the national grid and this will reduce the power deficit.

To boost output, the Government is pursuing extension works at its major power stations such as Hwange Thermal Power plant where construction of Units 7 and 8 is underway. The exercise would see the plant adding 600MW to the national grid.

Minister Soda said through the Government’s renewable energy policy, plans were also underway to invest in electricity generation projects using municipal waste.

“We have got those plans and we are encouraging investors to come and invest in such projects,” he said. — @okazunga.