Africa Moyo Senior Business Reporter
Government is set to meet senior officials from ZESA Holdings and independent power producers (IPPs) as it seeks to deepen local electricity generation with new focus on renewable energy, particularly solar and wind.
This comes as some giants in renewable energy from the United Arab Emirates, have shown interest in setting up 100 MW wind and solar power plants in the country.
Renewable energy is increasingly becoming popular with global financiers given its friendliness to the environment, compared to thermal energy. Energy and Power Development Minister Dr Joram Gumbo, revealed last week in an interview with The Herald Business.
Dr Gumbo, who had just arrived from a green energy conference organised by the International Renewable Energy Agency (IRENA), in Abu Dhabi, the United Arab Emirates, said his ministry now wants to pass legislation that gives effect to the new drive.
“As Zimbabwe, we are lagging behind several countries in terms of renewable energy and after the conference I attended last week, it has become imperative that we move with speed and create an enabling environment for the promotion of renewable energy,” said Dr Gumbo.
“My ministry will soon craft appropriate legislative framework to move from unsolicited procurement of renewable energy projects to renewable energy auctions at selected sites.
“Going forward, the ministry will engage public utilities and IPPs to expedite the development of these wind power projects.”
Dr Gumbo said Government now wants to “move with speed”, to ensure that both the Renewable Energy Policy and the Biofuels Policy are launched.
Draft documents are already complete and the ministry will finalise administrative procedures in the first quarter of this year.
Already, Access Power Dubai (Pvt) Limited has expressed interest in developing two 50MW renewable energy plants, which will generate power from solar and wind. The company’s officials engaged the Zimbabwe delegation, which also included the Director for Renewable Energy and Energy Conservation in the Ministry of Energy, Dr Sosten Ziuku, on the sidelines of January 10 to 14 Abu Dhabi conference.
“Access Power expressed their willingness to develop two projects in Zimbabwe which are; 50MW solar power plant to be developed in phases of 20MW, 20MW and 10MW, and 50MW wind power also to be developed in phases.
“Having already identified the two sites for the project, Access Power promised to officially submit an updated proposal in two weeks’ time. The parties agreed to prioritise the development of the first 20MW in the next 24 months,” said Dr Gumbo.
IRENA, a global institution with 160 members as at last year, has already extended technical assistance to Zimbabwe, which was useful in evaluating the development cost and applicable tariffs for solar projects at 16 sites across the country.
The technical and financial appraisals by IRENA show that the capital cost of solar projects is now much lower than previously anticipated. Tariffs for solar have also reached grid-parity, implying that the cost of solar power plants is now lower than that of conventional coal power plants.
Countries such as Germany, Chile and Egypt are now benefiting from solar electricity fed into the grid at less than 5c per kilowatt hour (kWh). This was achieved after the countries changed their procurement methods from unsolicited bids and renewable energy feed-in tariffs (REFIT) to renewable energy auctions.
Last year, IRENA conducted pre-feasibility studies for wind at five sites in Zimbabwe and the results have since been submitted to the Ministry of Energy.
Dr Gumbo said the results of the study show that Zimbabwe can develop wind farms at five sites at relatively “moderate cost and tariffs”.
Zimbabwe also took advantage of the Abu Dhabi conference to engage possible sources of funding for renewable energy projects from IRENA. It was established that countries keen on moving into the renewable energy sector can access concessional funding through the Abu Dhabi Fund for Development (ADFD).
The ADFD provides concessional loans for renewable energy projects ranging from US$5 million to US$20 million.
The loan facility has a five year grace period, payable over 20 years and carries a 2 percent interest. However, countries should provide a sovereign guarantee.
Said Dr Gumbo, “Given the attractiveness of this low-cost finance, my ministry will liaise with State enterprises such as the Rural Electricity Fund (REF), Zimbabwe Power Company (ZPC), Finealt Engineering (and) ZESA Enterprises (Zent) to submit projects for funding in the next funding project cycle to be opened in February 2019. Private sector businesses may also apply.”