Online Reporter
Nqobile Bhebhe
Zimpapers Business Hub
THE Zimbabwe Energy Regulatory Authority plans to shift from unsolicited bids in electricity procurement to a competitive bidding system, a move expected to enhance transparency, improve cost efficiency and attract credible investors.
ZERA said the transition, which is likely to take effect next year, will allow the industry sufficient time to adjust while aligning the power sector with international best practices.
Unsolicited bids refer to proposals made by companies without being invited by the authority, often resulting in speculative applications and inflated project costs.
In contrast, a competitive bidding system invites all interested players to tender for projects under clearly set criteria, ensuring transparency, efficiency and value for money.
ZERA chief executive officer, Mr Edington Mazambani, told delegates at the Zimbabwe Economic Development Conference (ZEDCON) in Bulawayo last week that there is a surge in unsolicited bids.
“In terms of energy procurement, we are now inundated by unsolicited bids,” he said. “We are going to move away to competitive bidding, probably by next year, so that we give the industry enough time to adjust.
“The shift from unsolicited bids will ensure that we have transparency, ensure cost efficiency and is expected to bring down electricity tariffs, and we will have high-quality projects.”
The regulator noted that some operators were applying for licences mainly for speculative purposes.
“We have a lot of people who are coming to be licenced for speculative reasons, and hold on to a licence and sort of brandish it to raise funding. It will reinforce the Government’s commitment to a fair investment climate.”
At the same time, a major policy shift has been initiated by the Government, allowing private players to participate in the retail sector of electricity, he said.
“There has been a major policy development by the Government. We have been tasked to ensure that we develop frameworks to quickly roll that out. The framework that has been adopted by the Government allows private players in the retail sector of electricity,” the ZERA CEO said.
The model will allow licenced operators to supply electricity directly to defined communities.
“For instance, you can adopt Cowdray Park and reticulate the whole locality, which is in the upwards of 30 000 (houses). You connect them and get the bulk supply of electricity either from the utility or a supplier of your own choice and reticulate power within the locality and collect revenue.
“We are busy working on modalities to see how we can quickly roll out the initiative,” ZERA added.
The authority said it is working on a regulatory framework that promotes transparency, fair competition and investor confidence.
“We also want to come up with a regulatory framework that ensures transparency and fair competition in the sector and gives a reasonable return to investors and rewards those who are efficient operators. We welcome both local and international investors.”
To further bolster investor confidence, ZERA noted that the Government, through the Ministry of Finance, Economic Development and the Ministry of Energy and Power Development, has initiated the Project Support Agreement to de-risk investments by Independent Power Producers (IPPs).
IPPs play a crucial role in generating electricity, primarily for their own consumption.
“There is the Government Project Support Agreement, which is initiated by the ministries of Finance and Energy, designed to de-risk energy investments by independent power producers, offering that foreign investors are guaranteed and protected to repatriate funds for payment of infrastructure and loans. We have confidence given by the Government.”
The measures are expected to improve investment inflows, create fair competition, and ensure affordable tariffs for consumers while reinforcing Zimbabwe’s commitment to energy sector reforms.
In its 2024 annual report, ZERA issued 20 electricity licences, with 17 being for power generation projects, which have a combined installed capacity of 786.08 megawatts), while the remaining three were for the retail supply of electricity.
The milestone reflects the authority’s continued drive to diversify and upscale power generation in the country, especially amid challenges faced by the national power utility, the Zimbabwe Power Company, which includes aged infrastructure and systemic technical and non-technical losses.
ZERA noted that the new licences mark a growing trend of companies investing in solar photovoltaic systems for either their own consumption or for supplying captive customers as part of risk mitigation and energy security strategies.
