Zimbabwe to Spend US$300 Million on Small Power Stations

Mini Hydro-Power Station (the Source)

Zimbabwe – The government of Zimbabwe has secured US$154 million for the repowering of its small thermal power stations and is also planning to spend over US$151 million to build several mini hydro-power stations, reports Bulawayo 24 news.

Zimbabwe already has five operational mini hydro-power stations with a combined output of 28,6 MW which is being fed directly into the national grid. One of these mini hydro-power stations was commissioned in August 2017 and was built at an investment of US$5,7 million by Old Mutual Zimbabwe.

Investments in mini hydro-power plants are a welcome effort to increase power generation in a country currently facing an almost two decades’ long electricity challenge which has seen lengthy power outages becoming a regular occurrence.

For many years Zimbabwe has resorted to importing power from other regional countries like South Africa and Mozambique to meet its electricity deficit.

Bulawayo 24 news also says the government of Zimbabwe is finalising the Renewable Energy Policy framework as well as the Independent Power Producer (IPP) framework, which are both expected to result in greater private sector involvement in mini hydro-power plants.

The publication further states that there is potential to develop small hydro stations at 17 dams across Zimbabwe, adding that the government of Zimbabwe is looking for investors for five "priority" mini hydro-power projects with a total value of US$150,5 million. The five potential small power stations can produce up to 53,8MW, with an annual output of 152 000MW.

However, concerns over low renewable energy feed-in tariffs have generally spooked IPP investors, resulting in lack of development at some projects licensed several years ago, says Bulawayo 24 news.

The paper’s report reveals that IPPs have been lobbying Government to increase the power tariff from the current average of US9,86c per kilowatt hour, to spur investor appetite, but permanent secretary in the Ministry of Energy and Power Development Partson Mbiriri said they are still working out a solution that would cater for the interests of both the investors and consumers.

Mbiriri said while Government assessed the feed-in tariff in 2013 and reviewed it in 2015, adding a new tariff would hurt consumers.

Conceding that coming up with an acceptable tariff would not be easy, Mbiriri was also quoted saying, "The problem with increasing feed-in tariffs is that consumers would get power at a higher tariff. So we want to balance the two issues so that people investing in electricity generation get some return but without exploiting consumers."

Meanwhile, investment in renewable energy is relatively on the upside in Zimbabwe, as seen with Old Mutual Zimbabwe financing the latest mini hydro-power plant to be commissioned in the country. However, the high cost of building min hydro-power stations still deters many potential investors.

This is also compounded by the fact that Zimbabwe’s power regulation agent Zimbabwe Electricity Regulation Authority (ZERA) has pegged electricity tariffs at US9,86c, seen by investors as being among some of the lowest tariffs in the SADC region.

Electricity tariffs in other countries are as high as US17c per kWh and Zimbabwe’s power utility ZESA, which is saddled with a high power importation bill from South Africa and Mozambique is busy lobbying ZERA to increase power tariffs to  US14,49c per kWh.