Africa-Press – Zimbabwe. Zimbabwe is working on a raft of measures to mitigate perceived risks of doing business in the local energy sector, a move meant to attract new investments towards the achievement of a 5 400 megawatts (MW) national output goal by 2030, a senior government official has revealed.
The Southern African country is facing a serious deficit and needs up to US$9 billion in energy investments to more than double its current power generation and meet rising electricity demand.
Speaking during a ministerial panel discussion at the Accelerated Partnership for Renewables in Africa (APRA) Investment Forum on Wednesday, Energy and Power Development ministry’s permanent-secretary Gloria Magombo said the country was implementing a robust de-risking framework to facilitate the sector’s access to funding for attainment of the ambitious target.
“From our experience in the energy industry, we realised that it’s more than just laws, policies and incentives. More needs to be done, because the issue of risk remains a key issue,” she said.
“We are still considered a risky destination and for me, it’s about perception so we need assistance in managing that perception because in other sectors the private sector is coming in to invest and we are still within the same country and continent.”
Magombo also said the country sought to improve international investor confidence through a strategy that encompasses fiscal guarantees, regulatory reforms, and a stable multi-currency regime.
“For those who have brought in foreign direct investment, they can be assured of being paid back in the currency of their economy,” she said.
“We have also gone on to review and come up with a government implementation support agreement, where the government is giving guarantees and I want to say that we need other guarantees at international level to assist our projects to get into financial freedom.”
Zimbabwe has an installed power capacity of nearly 3 000MW, but is currently generating around half of that chiefly owing to years of underinvestment in the energy sector.
“We need about US$9,1 billion investment in new generation capacity, transmission and distribution networks, because we cannot do projects, especially renewable energy projects, without having the right transmission and a distribution network that is smart enough to take in this viable energy,” Magombo told delegates, adding that the government was using the APRA platform to capacitate stakeholders for sustainable green energy business:
“We are working through the APRA framework to build capacity for our regulators in terms of how we incorporate new viable energy into our networks and we are also training our utilities to do the same.”
The second edition of the high-level renewables engagement comes at a time when the continent — which requires an average annual investment of US$70 billion in renewable energy — received only 2,3% of global investment in 2023, according to IRENA.
Several macroeconomic challenges, which include gaps in governance, limited institutional capacity, policy instability, and infrastructure limitations impede private sector investments in Africa.
APRA focuses on mobilising financing, engaging private sector partners, and enhancing technical capacity for its 10-member countries.
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