IPPs must shape up or ship out!
Lloyd Gumbo Mr Speaker Sir
As things stand, there will be no significant economic growth to talk about as long as our electricity generation is dropping because power is a core variable to economic growth.
Mr Speaker Sir, it is a fact that our electricity generation is going down while demand is ever on the increase if one considers the massive construction going on and the rise of small-to-medium enterprises that analysts and Government argue could actually be the backbone of the economy.
It is against this backdrop that electricity should be adequate to cater for those needs if Zimbabwe is to register significant economic growth.
Yes, pronouncements have been made about the economy being on the mend but this has not found expression on the ground because there is too much power outages due to depressed supply against demand.
Often times, the general populace and those educated enough to know better, actually blame Zesa for load-shedding and the incessant problems affecting the power plants.
They forget that demand is way more than the country’s power generation capacity.
Some even blame them for the reduced power supply due to low water levels at Kariba, though they should take stick for the continued problems at Hwange Power Station where the generators are continuously in the intensive care and forever under repairs.
Mr Speaker Sir, Government acknowledged that it could not solely run the power sector and opened it up to Independent Power Producers so that they can reduce the funding burden on Government but what have they done to justify their existence?
Government, through the Zimbabwe Energy Regulatory Authority issued licences to a number of IPPs, some of them more than five years ago and they were supposed to have been commissioned by now but where are they?
Out of the 20 IPPs that were licensed, about 10, predominantly small ones in outlying areas, are operational while the huge projects that would significantly change the country’ electricity situation are yet to take shape.
For instance, the proposed giant Sengwa Power Station was licensed in September 2010 and was expected to generate about 2 400 megawatts by 2014.
Lusulu Power Plant to the north of Sengwa in Binga, licensed in October 2010, was also expected to generate 2 000 MW by the end of 2013 while Eunafric Power Station in Harare was expected to start generating 120 MW by 2012 after licensing in September 2010.
GeoBase Clean Energy was licensed in January 2011 to operate an initial 120 MW concentrated Solar Power System in Gwanda.
These huge projects have a proposed combined capacity of about 4 600 MW which would have met the country’s electricity demands to the extent of having excess for export.
But Mr Speaker Sir, we are now in the fifth year since these licences were issued but the projects are yet to materialise or at least take shape, meaning that all things being equal, if they were to start constructing by the beginning of next year, they will only be completed by 2020, which is 10 years after their licensing.
The general argument has been that these mega projects require more time due to high financial costs but how long shall we wait for them when the country urgently needs investment in a viable sector?
These licensees have already wasted the country’s time by holding on to licences when they knew that they did not have the money to fund the projects.
They have been looking for funds for the past five years without making any headway, so what guarantee do we have that they will ever get the money?
It goes without saying that some of the licensees are just holding on to the licences for speculative purposes.
Some are pushing Government to approve an increase in electricity tariffs for them to start constructing, in the process holding the country to ransom just because they have been licensed.
Mr Speaker Sir, the country cannot be held to ransom by companies whose books are not in order, so they should either shape up or ship out.
Serious investors are crying out for investment opportunities in this sector because it has guaranteed returns.
IPPs can play a crucial role in addressing power needs if they have the zeal to invest in this sector.
Given that the private sector is one of the biggest electricity users justifies the need for them to invest in the power generation than count on the highly depressed national power utility.
So if these licensees are not ready to build, then the licences must be withdrawn and given to those with capacity.
Mr Speaker Sir, the current power deficit in Zimbabwe due to depressed generation at Kariba and Hwange is testimony to how the country is hanging precariously due to lack of alternative sources of power besides the two.
It doesn’t matter how many economic blueprints Government comes up with, they will not succeed as long as the electricity situation is not addressed.
Any significant economic growth can only be spurred by a sound power sector.
It is without doubt that poor electricity supply is a major constraint to the country’s short-term and long-term developmental objectives given the impact it has had on the agricultural sector and industry.
While agriculture is considered the backbone of the economy, the same farmers have been unable to get electricity at a time their crops needed uninterrupted power supply.
Some companies have been forced to rely on generators, further increasing the cost of production and rendering their produce uncompetitive on the international market.
But all this could be addressed if IPPs played ball. If they are not forthcoming, then Government should withdraw their licences.
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