Zimbabwe Plans a Green-Energy Fund to Boost Generation

HARARE (Capital Markets in Africa) – Zimbabwe plans a green-energy fund to promote the use of renewables, with the initial aim of making up a 600 megawatt shortfall in electricity production.

The southern African nation wants to generate at least 1,000 megawatts of power, or 16 percent of its total projected generation, through solar and other renewable energy systems by 2025, according to the energy ministry’s final draft of a policy document emailed to Bloomberg News. State-owned utility Zesa Holdings Pvt Ltd. now generates about 1,500 megawatts against demand of about 2,200 megawatts.

The fund will be backed by a sovereign guarantee, while the finance ministry “will develop a detailed plan to enhance the investor confidence and value of the guarantee in the market,” the document shows.

Electricity is available to about 40 percent of Zimbabweans, mainly in urban areas, with solar generation providing just four percent of all power. About a third of the country’s electricity comes from a hydropower plant at Kariba, the world’s biggest man-made reservoir, in the north.

Tax concessions will be offered to independent power generators selling electricity to Zesa Holdings, alongside reduced licensing fees.

“Being a clean source of energy, renewable-energy projects shall be provided concessions in licensing fees and enjoy relaxations in other licensing requirements,” the energy ministry said.