New IPP Agreement to be announced today

Most IPPs are licensed to build solar farms that feed into the national grid

Zim Now Writer

Government is today set to announce an agreement framework for independent power production that is expected to ease shortages.

“We have concluded the structure and framework of what we call the government implementation Agreement to support investment from IPPs. It will cover three areas — an appropriate level of tariffs; government guarantees on the power purchase agreement and also guarantee currency compatibility. They have asked for these three things and we have put three of the projects on the pilot. We are now satisfied that we can, as government, support. Monday next week (today), we will make an announcement and this will go a long way in the medium term in dealing with the power situation,” Finance Minister Mthuli Ncube told the National Assembly last week Friday.

Government has recently threatened to cancel licenses for dormant IPPs saying that they have failed to play their part.

https://zimbabwenow.co.zw/articles/1565/dormant-independent-power-generation-licences-to-be-canceled

According to the ZERA website, there are 30 IPP licence holders with the capacity to produce almost 200MW.

But most of them are not feeding anything into the national grid with a number citing viability under the current framework as the biggest stumbling block.

IPP holders have stated that finding investors under the current policy framework has proven an impossible task as massive forex investment is required, but they then have to sell their power in local currency and below production cost.