Of the 2.0GW of installed capacity in Zimbabwe, national power generator, Zimbabwe Power Corporation (ZPC) owns 1.9GW. Those plants suffer from reliability issues, and currently only around 900MW is available, equating to 50% of installed capacity and meeting 40% of peak connected demand. Due to this the country relies heavily on imports from its neighbours to meet demand, but they have been curtailed due to non-payment.
Zimbabwe’s power sector is split between ZPC and Zimbabwe Electricity Transmission and Distribution Co (ZETDC) which are both subsidiaries of Zimbabwe Electricity Supply Authority (ZESA).
The power generation sector recently received a boost with the financing of the Lake Kariba South expansion project to add 300MW more large hydro capacity, although the reservoir has recently faced low water levels. ZESA and ZPC are currently seeking finance to upgrade the Hwange coal plant and develop a coal bed methane project with a potential of up to 300MW in Lupane.
Zimbabwe’s clean energy sector was also boosted in 2014 as Nyangani Renewable Energy commissioned a 15MW small hydro plant to increase the country’s cumulative (non-large hydro) renewables capacity to around 120MW. Of that, 96MW comes from three biomass plants, with the rest made up of small hydro. The donor-supported Zimbabwe Reconstruction Fund is also looking at the commercial feasibility of five more mini-hydro systems.
The country’s regulatory framework makes it relatively easy for an independent power producer (IPP) to set up a project. But an IPP needs to sign a power purchase agreement (PPA) with ZETDC in order to sell into the grid, which has proven to be a major stumbling block. The transmission provider suffers cash-flow shortages and the onus is on the IPP to draw up the framework surrounding an agreeable tariff, which needs approval from the regulator.
Zimbabwe still lacks a clear renewable energy policy although the country has been working on renewable energy targets, feed-in tariffs (FiTs) and net metering for more than two years. The government expects to see its renewable energy and FiT policy come into force over the next year. Discussions continue over the implementation of FiTs, which were first proposed in 2013.
There is a biofuels blending mandate in force, which is set at 5%. The mandate changes sporadically depending on supply and has reached up to 15%. While the government intends to raise the mandate, investment has been slow due to non-cost reflective fuel prices and public resistance over perceived damage to engines.
The country offers tax incentives including import duty exemptions and tax holidays. The former apply to solar and electrical equipment but have not been updated since coming into force in 2010 – importers see it as outdated. While the tax holidays offer attractive rates they have yet to lead to any major investment from the private sector in energy projects, as some developers see the terms that the government currently offers as unfavourable.
Zimbabwe’s rural electrification fund has struggled since inception due to cash-flow shortages. Electricity access currently sits at 31% and utilizes grid extension and solar to expand access. The country has a target of electrifying all rural public institutions by 2018 with universal access by 2040. The fund offers different forms of subsidies depending on whether the applicant is a public institution or a rural home.
Score Summary
Zimbabwe scored 0.70 in Climatescope 2015, placing it 43rd on the list of countries overall, the same position it held in 2014. The country’s highest score was on Greenhouse Gas Management Activities Parameter IV.
On Enabling Framework Parameter I, Zimbabwe slipped one place to rank 42nd. Its score was supported by the presence of energy access policies and relatively high diesel and kerosene prices.
On Clean Energy Investment and Climate Financing Parameter II, the country was positioned near the bottom of the list. It took 48th place, one lower than in 2014, largely due to the lack of new investment.
Zimbabwe was placed 38th on Low-Carbon Business & Clean Energy Value Chains Parameter III, a decline of six places. Its score is supported by a modest number of clean energy service providers.
On Parameter IV, the country was ranked 34th, with moderately good scores for the number and diversity of carbon credits generated.