The Zimbabwe state-owned power utility ZESA has announced plans to add 2,300 MW of new power generation capacity to the grid by 2025, mostly from renewable energy sources to help meet the growing power demand from the country’s mining sector.
The southern African country has a power generating capacity of 2,000 megawatts (MW), of which only 1,400 MW is operational, with the rest of the capacity offline due to regular breakdowns at its thermal power stations, and low water levels at Lake Kariba.
Speaking at a mining conference in the resort town of Victoria Falls, the Chief Executive of ZESA Howard Choga, said: “We expect that by 2025, we would have added 2,300 MW to the grid. I must say over 80% of the 2,300 MW is demand from miners.”
Choga revealed that new power generation capacity could come from floating solar projects planned at Kariba dam. Chinese state owned company, China Energy Engineering Corp. (China Energy), earlier this year proposed to construct a 1 000 MW floating solar plant at an estimated cost of $987 million on Lake Kariba, the world’s largest artificial lake where the biggest hydro power station is located.
Addressing investor skeptism on Zimbabwe
Zimbabwe is also hoping to attract independent power producers to help increase the country’s lower power generation capacity. The Southern African has had to contend with power cuts of up to 12 hours daily due to low power generation capacity.
Renewable energy has had a slow take off in Zimbabwe due to lack of investment, and perceived political and regulatory risks on the country.
The government in December last year announced various incentives in a bid to help attract independent power producers to the country. IPPs will be able to sign a government implementation agreement (GIA), which includes a project development support agreement, a power purchase agreement, and an agreement with the Reserve Bank of Zimbabwe for guaranteed payments of dividends and foreign loan repayments to external investors and lenders.
Zimbabwe’s Finance Minister, Mthuli Ncube, outlined that the government will guarantee viable power tariffs and PPAs to projects that pass the screening process. “A key ingredient to the successful implementation of the solar IPPs projects is a bankable government implementation agreement with an economic tariff,” said Ncube.