Energy sector attracts huge investments

ZIMBABWE is attracting a huge interest in solar investments from across the world and from local players, with more than 100 000 solar power systems installed in homes across the country. 

According to government figures, off-grid solar power is no longer new for homeowners but despite decades of power shortages, solar energy companies are only starting to catch on.

Leading telecommunications company, Econet Wireless, through its energy business, Ugesi Energy, recently launched a $45 million solar power rural electrification programme under the first phase, targeting 100 growth points across the country.

Meanwhile, Shanghai Stock Exchange-listed CHiNT Electric Company has reaffirmed its commitment to seeing through the successful implementation of the 100 Megawatt Gwanda solar project after its local partner, Intratrek Zimbabwe, won a contract dispute at the High Court. 

With a staff compliment of over 29 000 people worldwide, CHiNT has successfully installed an average of 5 000MW of solar generation plants worldwide, including power systems for the Zimbabwe Electricity Transmission and Distribution Company.

CHiNT has experience doing projects in Zimbabwe including the 132Kv Norton sub-station, 132Kv Sherwood substation, 132Kv Gweru substation, 132Kv Zvishavane substation and 132Kv Redcliff substation among others.

Another Chinese company, China Nanchang Engineering, has approached the Harare City Council with a deal to supply 600 green energy (solar-powered) buses and additional fixed and working capital to service routes in Greater Harare Metropolitan. The project will include a central business district shuttle service and the Harare Urban route will service all suburban routes.

According to the Zimbabwe Energy Regulation Authority (Zera), the renewable energy sector in Zimbabwe is picking up following support from government, in trying to open up space for private players. The country has an Electricity Act which allows the participation of private players, and government is drafting new regulations to enable renewable energy investments. 

Zera acting Chief Executive Officer, Engineer Misheck Siyakatshana, said government is set to launch the Renewable Energy Policy which will expedite the harnessing of energy supply from diverse sources and technologies in the country. 

“The Renewable Energy Policy focuses on obtaining cost-effective implementation of productive energy sources, social upliftment through community involvement, gender equality and employment. 

“The policy aims to achieve an installed renewable energy capacity of 1,100 MW (excluding large hydro) or 16,5 percent of total electricity supply, whichever is higher by 2025 and 2 100 MW or 26,5 percent of total electricity supply, whichever is higher by 2030. This target will enable the country to meet the supply deficit as well as meet the emissions objective,” said Eng Siyakatshana.

He said the policy offers specific incentives such as domestic content requirements for renewable energy systems installed in the country, approved standards and specifications, and financial and tax incentives to promote domestic manufacturing of renewable energy equipment. 

Early this year, President Mnangagwa and his Belarusian counterpart President Alexander Lukashenko sealed eight agreements, and also advanced a grand infrastructure scheme that could make Zimbabwe a regional transport and logistics hub. 

The eight agreements cover various aspects of education and training, science and technology, agriculture and legal issues such as extradition.

Belarus will also invest in irrigation systems, residential housing, roads (possibly with China), and a 100MW solar power plant, a control system and distribution network in Zimbabwe.

Industry and Commerce Minister Mangaliso Ndlovu revealed that government has taken a keen interest and made deliberate efforts to prioritise renewable energy such as solar investments. 

“On ease of doing business reforms, making reference to renewable energy such as solar and power generation, our focus is to make sure that we facilitate smooth processing of investments, expedite as well as to make sure that we interrogate the compliance fee structure of our investments.

“We realise that we have a prohibitive fee structure; when one wants to set up a business, they are looking at this. So, we want to make sure that we are able to process our investments in record time, taking into account that we are competing with many nations in the region, continent and on the global stage,” said Minister Ndlovu.

In 2018, the Zimbabwe Power Company sought $500 million to revamp the Hwange Thermal Power Station, which uses coal to generate electricity but now, Zimbabwe’s strategy is changing to refocus on renewable energy investments.

Director of Water and Climate Change Management in the Lands and Agriculture Ministry, Mr Washington Zhakata, told the Justice Mayor Wadyajena-led Parliamentary Portfolio Committee on Agriculture earlier this year that there was a need to begin to re-strategise and go for cleaner power generation projects like hydro and solar-powered electricity, rather than investing in thermal power which developed countries will have phased out by 2030.

Some of the power stations that use thermal power include Hwange, Harare, Munyati and Bulawayo. According to Mr Zhakata, dialogue was critical to eradicate coal, one of the heaviest polluters of the environment. Coal, however, brings the much-needed foreign currency into the country.

“We are establishing a one-stop-shop investment services centre where an investor walks through the door, everything gets processed and when he walks out the door, he doesn’t have to go to any other door, in terms of processing that particular investment,” he said.

Zimbabwe is ranked 155 among 190 economies in the Ease of Doing Business index, according to the latest World Bank annual ratings. The rank of Zimbabwe improved to 155 in 2018 from 159 in 2017. Ease of Doing Business in Zimbabwe averaged 161,91 from 2008 until 2018, reaching an all-time high of 171 in 2011 and a record low of 153 in 2014.

The Ease of Doing Business index ranks countries against each other based on how the regulatory environment is conducive for business operation. Economies with a high rank (one to 20) have simpler and friendlier regulations for businesses.