Government licenses 27 IPPs with 1000MW

Gilbert Munetsi

Government has licensed 27 approved Independent Power Producers with a collective capacity of 997.9MW to the national grid under the standardised Government Implementation Agreement.

Finance Minister Mthuli Ncube announced the 27 producers in his address at a briefing held at Meikles Hotel today (Monday).

“The (NDS1) strategy clearly outlines that Government policy will promote independent grid operators who want to contribute power into the national grid and to their clients.

“To this end, Government intends to speed up investment by the Independent Power Producers Projects with main focus on solar projects. A key ingredient to the successful implementation of the solar IPPs projects is a bankable GIA with an economic tariff,” said Minister Ncube.

Present at the briefing were Energy and Power Development ministry officials, ZERA and ZESA.

Minister Ncube said the GIA comprises a Project Development Support Agreement, Power Purchase Agreement and the RBZ Undertaking for Foreign Currency Convertibility and Transfer.

The African Legal Support Facility (an international Organisation hosted by the African Development Bank Group in Abidjan Cote d’Ivoire) has rendered legal advice and support with coming up with the standardized GIA which is in line with the international best practice.

“The solar IPPs projects are at various stages in their investment processes. Some have their PPA negotiated with ZETDC, which Government is now extending Government Guarantees.

“Government guarantees the economic tariff to qualifying IPPs solar projects that would have passed the screening process. After an IPP has successfully completed the screening process, a GIA is signed and the investor is ready to invest.

Minister Ncube said the IPPs - being implemented at an overall cost of US$1 billion - are in line with the National Renewable Energy Policy strategy that seeks to achieve and install renewable capacity of 16.5% of total electricity by 2025.

The medium to long term aim is to have increased renewable energy capacity to 2, 100MW or 26,5% of the overall electricity supply by the year 2030.

According to Prof Ncube, the latest development will ensure the production and use of renewable sources in the grid and off-grid with an aim to raise the share of renewables in the energy mix by creating incentives from the supply, to distribution and demand, in both urban and rural areas.