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Nqobile Bhebhe, Senior Business Reporter
TWENTY-SEVEN independent power producers (IPPs) with an estimated combined output of 1 000MW have been recommended for Government support, a massive boost to the projects as the Second Republic is speeding up investment by the IPPs with main focus on solar projects.
Government has also guaranteed economic tariffs to qualifying IPPs solar projects that would have passed the screening process, Finance and Economic Development Minister, Professor Mthuli Ncube, said.
Power producers, especially Zesa, have in the past called for tariffs to be cost reflective.
Because of sub-economic tariffs, at one point the power utility could neither service nor buy boilers, transformers and secure oils and chemicals that should all be paid for in US dollars.
Of the 27 identified solar projects, Matabeleland region has five projects with a combined power outlay of 325MW.
The identified firms are Matshela Energy in Gwanda, which has 100MW plan, Sinogy Power located in Chapfuche Farm, Beitbridge (75MW), AF Power, Upper Nondwene Estate in Bulawayo District (50MW), Parvalue, Westgate suburb, Donnington West, Bulawayo (50MW) and another 50MW by Yellow Africa at Subdivision of 3 Broad Acres, Imbesu 3, Ward 8, Umguza Rural District.
The development has boosted confidence of IPPs implementers who said the Government has been decisive in dealing with the power challenges.
On Monday, Prof Ncube announced the standardised Government Implementation Agreement (GIA) for all solar IPPs projects.
He said in line with national vision of attaining an Upper Middle-Income Status by 2030, the major key enabler in realising sustained economic growth is stable, sustainable, reliable and affordable electricity supply.
“In order to achieve the objective of powering the economy towards upper middle-income by 2030, Government undertook to upgrade, rehabilitate and maintain the existing power generation infrastructure with priority being given to the development of new generation capacity through fast-tracking ongoing projects and opening new projects, which take cognisance of a diversified energy mix,” said the minister.
“The strategy clearly outlines that Government policy will promote independent grid operators who want to contribute power into the national grid and to their clients.”
To this end, the Government intends to speed up investment by IPPs with main focus on solar projects, he added.
The minister said the key ingredient to the successful implementation of the solar IPPs projects is a bankable GIA with an economic tariff.
The GIA has three major components namely Project Development Support Agreement, power purchase agreement (PPA) and the Reserve Bank of Zimbabwe Undertaking for Foreign Currency Convertibility and Transfer.
“The solar IPPs projects are at various stages in their investment processes. Some have their PPA negotiated with ZETDC, which Government is now extending Government Guarantees,” said Prof Ncube.
“Government guarantees the economic tariff to qualifying IPPs solar projects that would have passed the screening process.”
Matshela Energy managing director, Mr Matshela Koko, yesterday commended the Government for the support agreement saying the development is a game changer for the power sector in Zimbabwe.
He said the Government support agreement will ensure that the independent power projects are bankable.
“We are pleased that the Government of Zimbabwe has worked in a very co-ordinated way to implement the necessary Government support agreement that will make the independent power projects in Zimbabwe bankable.
“This is a game changer for the power sector in Zimbabwe. The Government has been decisive in dealing with the power challenges in Zimbabwe. We don’t take it for granted and will deliver and make the people of Gwanda happy.”
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