Funding gap frustrates IPPs
Most of the planned electricity generation projects by licensed Independent Power Producers (IPPs) are in limbo due to funding constraints as players fail to get suitors, it has been learnt.
Since 2010, the Zimbabwe Energy Regulatory Authority (Zera) has licensed over 70 IPPs to establish electricity generation plants across the country, but the investments have failed to take off.
The licensed IPPs have promised to produce over 6 000MW combined, but the projects are only producing a paltry 135MW.
The country continues to suffer serious electricity deficit and is now relying on Kariba Power Station.
Responding to questions in Parliament Wednesday, Energy and Power Development Minister, Zhemu Soda, said after licensing by Zera, the bulk of the IPPs went to the market to scout for funding from potential investors but to no avail.
“Up to now not many of them (IPPs) have produced anything. Some of them were issued with these licences more than five years ago, but what has been happening is that the prospectors came and applied for licences without funding.
“After they had acquired licences, they would then start to look for investors to assist them, but most of them failed to attract investors to implement their projects,” he said.
Minister Soda said this is why most of the IPPs have failed to come up with electricity that they had promised to generate. Zimbabwe requires an additional 9 000MW to support economic activities that will drive the country towards achieving an upper middle-income economy by 2030.
The country’s demand for power hovers around 2 000MW. However, due to ageing equipment, existing power plants are generating far below the national requirement.
It is hoped that the IPPs, some of which are companies in different sectors of the economy, would produce electricity to meet their individual operational requirements while excess power would be fed into the national grid to reduce the deficit.
To boost output, the Government is pursuing extension works at its major power stations such as Hwange Thermal Power plant where construction of Units 7 and 8 is underway.
The exercise would see the plant adding 600MW into the national grid on top of the installed capacity of 920MW.
Minister Soda said through the Government’s renewable energy policy, plans were underway to invest in electricity generation projects using municipal waste.
“We have got those plans and we are encouraging investors to come and invest in the waste on electricity projects.
“We are looking for investors in that. It is one area where we can generate more electricity if we get investors into that area,” he said.–herald.cl.zw
