British financier eyes Zim’s grid deal

PHILLIMON MHLANGA

A British State-backed financier, Gridworks, is in advanced talks to deploy more than US$300m into Zimbabwe’s electricity transmission and distribution network, in what would be one of the most significant interventions in the country’s long-neglected power infrastructure.

Business Times, a market leader in business, financial and economic reportage, can report that Gridworks, a London-based platform owned by British International Investment, the UK’s development finance institution, is in advanced talks with the Zimbabwe Investment and Development Agency (ZIDA) over a potential transaction centred on modernising and expanding the national grid.

Officials familiar with the discussions said the focus is squarely on transmission and distribution assets.

ZIDA has already completed a risk profiling exercise on Gridworks and is understood to be satisfied with the outcome, clearing a key hurdle in the engagement process.

The engagement, reflects a broader shift among development finance institutions towards electricity networks rather than generation alone, as governments across Africa grapple with high system losses, ageing infrastructure and constrained fiscal space.

Established in 2019, Gridworks was created specifically to channel long-term capital into electricity transmission and distribution systems across emerging markets, particularly in Africa. The platform typically structures investments through public-private partnerships, utility concessions and grid expansion vehicles, combining early-stage project development with long-horizon infrastructure funding.

Zimbabwe’s investment promotion agency, Zimbabwe Investment and Development Agency, confirmed it is actively engaging Gridworks as part of its targeted capital mobilisation strategy.

“As part of our promotion efforts, we identify potential investors coming to the continent and align them with our private sector development priorities,” said Tapindwa Chipunza, investment development manager at ZIDA. “Gridworks is a global financier of transmission projects and has recently increased its focus on southern Africa. They are coming in with a dedicated fund, and discussions are at advanced stage.”

If concluded, the deal would mark a rare large-scale entry by a UK-backed infrastructure investor into Zimbabwe’s electricity sector at a time when the country remains largely reliant on domestic financing constraints and short-term rehabilitation projects.

Zimbabwe’s state-owned utility, ZESA Holdings, has recently acknowledged that more than 20% of generated electricity is lost through technical and commercial inefficiencies across transmission and distribution networks. The losses are attributed to decades of underinvestment, ageing equipment and rising incidents of infrastructure vandalism.

Copper theft has become a recurring challenge, prompting utilities to progressively shift towards aluminium conductors in an effort to reduce the attractiveness of grid infrastructure to scrap metal syndicates.

The country’s power deficit remains structurally entrenched. Zimbabwe requires about 2,200 megawatts (MW) to meet peak domestic demand but is currently generating approximately 1,400MW, with the gap frequently bridged through imports from regional utilities.

The shortfall has become a binding constraint on industrial output, with manufacturers repeatedly citing unreliable electricity supply as one of the largest impediments to capacity utilisation, expansion and cost competitiveness.

Against this backdrop, transmission infrastructure, long overshadowed by high-profile generation projects such as solar and thermal expansion,is gaining renewed policy and investor attention.

Analysts argue that strengthening the grid could unlock latent generation capacity, reduce system losses and improve the efficiency of both domestic and imported power flows.

“Without grid modernisation, generation investment alone cannot solve the supply crisis,” one infrastructure analyst said.

For Gridworks, the Zimbabwe opportunity would extend its regional footprint at a time when development finance institutions are increasingly repositioning themselves as catalysts for private capital into hard infrastructure, rather than sole providers of concessional funding.