eBusiness Weekly
Livingstone Marufu
International Finance Corporation (IFC), an arm of global lender, the World Bank, has expressed interest to invest in multi-million dollar in off-grid energy projects in Zimbabwe, as part of interventions to improve power supplies in the country and lessen burden on the main power supplies.
This comes at a time when the world and some erstwhile ‘enemies’ of the previous administration have paid heed to President Mnangagwa’s open for business mantra, resulting in the various investors scrambling to tap into investment opportunities in the country’s key economic sectors.
After a decade of Western embargoes, IFC came to Zimbabwe mid-May to explore opportunities in the country’s energy sector, given that the World Bank’s private sector focused unit is investing in commercial off-grid energy projects, which empower rural populations, farmers and miners.
Though the IFC has not disclosed the amount of money of investment, it is believed that the company wants to build power plants for 100MW output across the country.
Energy industry voluntary member Zimbabwe Energy Council (ZEC) director Panganayi Sithole, who met the IFC team on May 7 2018 told Business Weekly that IFC was expected to return to Zimbabwe in July to give a framework of the various off-grid energy projects is was targeting.
“Zimbabwe is indeed open for business, the World Bank through its arm, IFC has come to Zimbabwe to seek opportunities in off-grid energy projects on May 7 to May 11 after two decades of total blockade.
“This is a welcome development for Zimbabwe and the energy sector as it has shown that the country has made some strides in improving ease of doing business,” said Sithole.
He added, “Off-grid energy projects will be a game-changer to the country’s energy sector as it will lessen the burden to main suppliers.
“If successfully implemented, main energy suppliers will be providing main economic sectors such as mining, manufacturing and commercial farming, with off-grid energy projects expected to speed up rural electrification, helping local farmers and miners power their activities without overloading Hwange and Kariba.”
Road to energy self sufficiency
With Kariba South Power Station extension project having been completed, Hwange Power Station extension and maintenance projects on course and Gwanda solar project on cards, the off-grid energy projects will be icing on the cake as far as country’s energy self-sufficiency is concerned.
Zimbabwe, which requires 1400MW daily in summer and 1600MW in winter, produces an average of 1400MW daily with the balance exported from South Africa and Mozambique.
At its peak Zimbabwe generated around 1 301MW in February and if the power utility maintains that level, off-grid energy projects will push Zimbabwe to self- sufficiency thereby eliminating imports which gobbled around $300 million in 2017.
IFC on the move
Since 1956, IFC has invested $265 billion in financing for small businesses in developing countries, especially Africa.
Zimbabwe has not directly benefited from IFC, but given new perspectives under the new administration, IFC wants to invest millions of dollars in Zimbabwe’s energy sector.
IFC team leader to Zimbabwe Daniels Shepard said: “IFC, a member of the World Bank was in Zimbabwe for a scoping mission to Zimbabwe from May 7 to 11 May.
“The thrust of the mission to explore the possibility of Zimbabwe Country Program to support the development of a commercial market for off-grid energy products.
“The proposed program will address the following with in the off-grid sector: Government and policy issues impacting the penetration of off-grid solutions, business development to assist the private sector in viable projects and access to finance and derisking of off-grid sector,” said Shepard.
The team met with key stakeholders in sector which included Rural and Electrification Fund, Honey and Blanckenburg, Samsco, ZETDC, banking sector and private sector through Zimbabwe Energy Council.
The IFC being private sector financing arm of the World Bank took time to know the architecture, size and operations of the energy sector in Zimbabwe.
It also sort to understand past private sector initiatives, programmes, barriers and opportunities in off-grid sector.
A follow up IFC team is expected in June/July to take a deeper study of the proposed programme for Zimbabwe.
The country has secured credit lines for upgrades and new power stations from China, the African Development Bank, the World Bank, India’s Export-Import Bank, the European Union and the Zimbabwe Multi-Donor Trust.
The projected national power output is expected to go beyond 4 000MW given that most Independent Power Producers (IPPs) licensed recently will also be running at full throttle.
The IPPs recently said they need $10 billion to construct 13 new power plants.
