KINGSTONE ZIMUNYA
EXPO CITY, Dubai—The COP28 climate summit is in full force in Dubai's Expo City. Forget the controversy; countries, institutions and enterprises are networking amongst themselves, seeking opportunities to turn to sustainable energy as a climate change mitigation strategy.
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| ZESA chairman Dr Sydney Gata |
Zimbabwe has managed to sign significant agreements for its energy sector, duly represented by the Zimbabwe Electricity Supply Authority(ZESA). The struggling power utility is at COP28 to drum up support and seek investment for its plan to migrate to sustainable energy. The agreements were signed on Sunday at the Zimbabwe pavilion at the Dubai Expo City.
Hedging the Risk of Investing in IPP's
The first deal was signed on Sunday with UK-backed Africa GreenCo, and is a potential game changer for the Zimbabwean energy industry. The two entities signed a System Operations and Wheeling Agreement, meant to ease the risks that have kept energy investors away from Zimbabwe.
While Zimbabwe has licenced independent power producers(IPPs) with projects of a potential 7,000MW, investors have stayed away due currency uncertainty and tariff risks. Affording to the daily power generation statistics released by ZETDC, IPP's barely make a contribution to the national grid.
Under the System Operations and Wheeling Agreement signed between GreenCo and ZESA, GreenCo will provide up to 18 months’ cash cover for energy investors. If there is default by ZESA or other involved offtakers, GreenCo will step in to cover that risk.
In a press briefing at the signing of the agreement, ZESA executive chairman Dr Sydney Gata explained, “What GreenCo has come to do is to assist both ZESA and Government by providing a mezzanine guarantee structure where they will issue commercial securities to assist IPPs to reach markets.”
“Africa Greenco will access and use our grid for electricity trading. This will open up opportunities for renewable energy integration, facilitate the efficient use of our resources, de-risk investment into renewable energy and also reduce burden on the fiscus," he added.
Cathy Oxby, GreenCo’s Chief Commercial Officer, said: “As the role of utilities evolves, it is vital to put in place arrangements which enable new market participants to utilise the existing grid infrastructure while remunerating utilities fairly for the essential services they provide and the costs they incur in operating and maintaining the network."
GreenCo is funded by InfraCo, part of the Private Infrastructure Development Group (PIDG), a venture jointly owned by the UK, Netherlands and other countries.
Africa GreenCo’s model is to manage risks for investors by committing to buy power from IPPs and selling it to either private customers or trading it on markets in the regional pool, SAPP.
They have already implemented projects in Zambia and South Africa, with other SADC countries such as Namibia expected to join in.
Dr Gata said Africa Greenco’s presence exemplified the importance of private sector participation in the development of our energy industry and aligns with the vision of transitioning to a greener energy landscape without placing an undue burden on governments and the public sector.
Greenco chief executive Ms Anah Hajduka said access to Zimbabwe's grid will enable GreenCo to support the development of renewable energy generation and to provide new sources of supply to the many burgeoning Zimbabwean businesses that urgently require additional power to implement their ambitious expansion plans.
She said Africa GreenCo Group, through its Zimbabwean operating subsidiary ZimGreenCo Power Services (Pvt) Limited was committed to advancing the renewable energy sector in the region and fostering sustainable development. The company has already got approval for its Zimbabwean retail supply licence from the Zimbabwe Energy Regulatory Authority.
Solar Collectors To Replace coal-powered Boilers
Also on the sidelines of COP28, Sweden’s Absolicon Solar Collector AB announced plans to build a US$7.6 million factory to make solar collectors in Zimbabwe.
Solar collectors are devices that collect solar energy to heat water, making steam to turn turbines. ZESA plans to replace its 1,400 coal-fired boilers with this climate-friendly technology. Zimbabwe is well poised to utilise solar energy, given the country enjoys sunlight for about three quarters of the year.
The agreement was made possible by Zimbabwe’s Ambassador to Sweden, Priscila Misihairabwi Mushonga, who saw opportunities in solar projects in Sweden and reached out to ZESA. She was present at the signing ceremony.
The agreement will see a robotic manufacturing plant producing solar collectors being established in Harare. The solar collectors will provide fossil-free heat for use in boilers, as well as solar energy for household and industrial use.
“Today marks a momentous occasion as we gather here to witness the signing ceremony between ZESA Holdings and Absolicon, marking a significant step towards a cleaner and more sustainable future for Zimbabwe.
“The solar collectors produced by Absolicon’s robotic manufacturing plant will heat water to produce steam at temperatures of up to 160 degrees Celsius, thereby offering a clean and renewable energy alternative.
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| Signed and sealed: Dr Gata and Mr Bystrom signing the agreement |
“By deploying these collectors in various sectors such as hospitals, beverage manufacturers, tea estates, hotels, and district heating, we will significantly reduce our reliance on coal-fired boilers, which contribute to carbon emissions and air pollution,” said Dr Gata.
Dr Gata said with the establishment of the robotic manufacturing plant Zimbabwe will be able to produce the solar collectors locally, eliminating the need for long-distance transport and reducing carbon footprint.
Modalities are underway to finalise processes leading to start of actual civil works.
Absolicon chief executive Mr Bystrom said the two partners will cooperate in mass production of solar collectors in Zimbabwe.
“The agreement describes the steps to the establishment of Absolicon’s robotised production line and involves an initial payment of €100,000. The plans for a production line in Zimbabwe show that the demand for renewable and secure energy supply is global,” said Mr Byström.
UAE's $70m cable manufacturing factory
ZESA also announced a US$70 million joint venture with the UAE’s QLV, owned by Sheikh Ahmed Al-Qassimi, to manufacture cables in Zimbabwe.
The programme is expected to address challenges faced by ZESA, such as the backlog of customer connections and the need to replace over 60% of underground cables in Harare and Bulawayo.
At the time of publishing, further details concerning this agreement had not been made publicly available.
Step towards progress or yet another 'mega deals' fluke?
During Mugabe’s era, several 'mega deals' were signed, especially with China, raising hopes of a swift economic turnaround, only to disappear from the radar after the pomp and fanfare.
That trend had continued in the Second Republic, with President Mnangagwa signing investment deals worth billions of dollars — some opaque or dubious — that never see the light of day.
Therefore, one cannot be blamed for thinking that these deals signed by ZESA at COP28 are just another 'mega deals' fluke.
Yet, Zimbabwe is in dire need of a solid power generation plan. Increased mining and farming activity, a growing population, and knock on effects of rural electrification are some of the factors that have led to a spike in electricity demand, versus an ever diminishing supply. Zimbabwe currently produces about 1,200MW, against a peak demand of 1850MW.
Thus, the much needed triad of sustainable energy, efficient financing models and infrastructure upgrades that these three deals offer cannot be left to politicking. The partners involved must deliver on their mandate, and the government of Zimbabwe must offer utmost support towards these projects to ensure their completion.
These three projects may be the catalyst that delivers Zimbabwe’s goal of increasing its renewable energy capacity to 26,5%, and ultimately—becoming a middle income economy by 2030.
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