Zimbabwe has announced a government implementation agreement (GIA) to expedite the commissioning of 27 solar IPP installations. The 1 GW of projects range from 5 MW arrays to 100 MW solar parks and will cost about $1 billion in total.
The government has promised to help make the IPP projects bankable. The GIA includes a project development support agreement, a power purchase agreement, and an agreement with the Reserve Bank of Zimbabwe for guaranteed payments of dividends and foreign loan repayments to external investors and lenders.
Finance Minister Mthuli Ncube said that the government will guarantee viable power tariffs and PPAs to projects that pass the screening process.
“A key ingredient to the successful implementation of the solar IPPs projects is a bankable government implementation agreement with an economic tariff,” Ncube said in a statement.
The incentives are part of Zimbabwe’s plans to achieve upper middle-income status by 2030, as a diversified, reliable, and affordable electricity mix will be a key factor in achieving that goal, Ncube said. The country aims to generate 1.1 GW of electricity from renewable sources by 2025, but its volatile currency and unattractive tariffs have kept IPP investment at bay.
The announced incentives will be “game changers” for Zimbabwe’s power sector, Mathesha Koko, managing director for South Africa-based IPP Mathesha Energy and a former Eskom CEO, said on Twitter last week.
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“We are pleased that the government of Zimbabwe has worked in a very coordinated way to implement the necessary government support agreement that will make the independent power projects in Zimbabwe bankable,” he added.
Zimbabwe had 30 MW of installed PV capacity at the end of 2021, according to the latest statistics from the International Renewable Energy Agency (IRENA).
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