Government to allow private investors in energy sector
Tuesday, July 27, 2010
Business Reporter
ZIMBABWE will soon open up its doors to investors in the energy sector to
invest as independent power producers or public-private partnership
arrangement in the development of larger power projects in the country.
The country’s energy sector, which produces about 1 100 megawatts of
electricity on average, with a peak demand of about 2 100 megawatts, and
imports between 300-500 megawatts mostly from Mozambique and Zambia faces
serious challenges, which have a negative impact on economic development.
President Robert Mugabe recently said erratic power supplies were affecting
economic development.
He said Government is working on a number of initiatives aimed at easing the
situation that has negatively affected capacity utilisation in industries.
“Persistent erratic power supply remains a potent threat to the successful
turnaround of the economy.
“However, Government is working on initiatives which would see a gradual
easing of the situation,” said the President.
Government is currently working on the refurbishment of the coal-fired
Hwange Power Station, where five out of the six units are expected to become
operational by end of this year.
Power generation at Hwange will be expanded by 600 megawatts and the Kariba
hydropower station by about 300 megawatts.
However, there is huge further potential to expand power generation capacity
through hydropower projects, which could deliver an additional 5 000
megawatts.
Other smaller hydropower projects that can be constructed near small rivers
and dams could add more than 200 megawatts to the country’s generation
capacity.
Government had earlier indicated that they are looking for IPPs to help
develop or to set up these projects, saying that producers did not
necessarily have to export the power to the national grid.
IPPs would also be allowed to sell their power to other electricity users in
the country.
Other options for expanding the power generation capacity of Zimbabwe
included the country’s coal-bed methane reserves of about 1,1 trillion cubic
feet, as well as its 11,8-billion metric tons of coal.
The Bulawayo Thermal Power Station, which has not produced electricity for
nearly a decade will soon be resuscitated in a deal with the Botswana Power
Corporation. BPC has agreed to inject US$8 million in to the project.
President Mugabe also noted that the use of renewable energy sources such as
ethanol blending would also be promoted to ease power demands.
He said these measures need to be complemented by implementing demand-side
management measures and the promotion of efficient use of energy.
In line with these measures, the Zimbabwe Electricity Supply Authority is
working on the installation of prepayment metres to help in billing and
revenue collection.
The Energy Regulatory Bill, which seeks to establish an Energy Regulatory
Authority to regulate the energy supply industry would be tabled in
Parliament during the current session.