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Conrad Mwanawashe Business Reporter

GOVERNMENT will by 2020, review the Rural Electrification Fund Act to broaden the mandate of the Rural Electrification Fund to transform it into a Rural Energy Agency, a senior official has said.The transformation to the Rural Energy Agency will result in the establishment of a Rural Energy Fund which will operate a revolving fund providing grant and subsidy-funding for rural households.

The Rural Electrification Fund Act provides for the funding of REA programmes through levies, loans, fiscal allocations, grants and donations.

Currently, the Rural Electrification programmes are primarily funded through a 6 percent levy on all electricity consumers as well as fiscal allocations.

Acting planning and technology director at the Rural Electrification Agency, Cliff Nhandara said the organisation requires more resources given its mandate.

For instance, Eng Nhandara said capital expenditure for a chosen level of service providing lighting and phone charging for 96 798 households, REA requires about $37,1 million which figure jumps to $1,7 billion which includes high power appliances.

“If we provide off grid solutions to Matabeleland North and Matabeleland South we would need $37,1 million. However, if we provide Tier 2 only (which includes lighting, phone charging, televisions and fan) in those two provinces we require $53,6 million,” said Eng Nhandara.

These figures are beyond the financial capacity of REA because it collects only six percent levies and grants.

In that regard, plans are afoot to set up the Rural Energy Fund, a revolving fund for rural households.

Eng Nhandara said REF will also expedite the review of the Rural Energy Master Plan, which will guide the pathway for rural energy access in Zimbabwe.

“On its part, the Ministry of Energy and Power Development should consider developing a rural energy policy to guide the operation of the Rural Energy Master Plan,” he said.

Furthermore, Eng Nhandara said the Zimbabwe Electricity Transmission and Distribution Company will complete the roll-out of prepaid and smart meters by 2020 to improve revenue collection.

Increasing revenue collection by ZETDC will translate to improved financial capacity for the Rural Electrification Fund.

“The Ministry of Energy and Power Development will partner with other Government ministries, development partners, NGOs and private sector to unlock the economic value of rural areas and promote productive use of electricity, empowering households and increasing their ability to pay for electricity,” said Eng Nhandara.

In that regard, the Zimbabwe Energy Regulatory Authority will explore enactment and application of light handed regulations to mini-grids establishment and operation to spur their development.