IFC, Govt in off-grid power negotiations

  • World Bank arm back in Zim for energy exploration
  •  Govt identifying potential investment areas

Livingstone Marufu

HARARE – The private sector lending unit of the World Bank Group, the International Finance Corporation (IFC), has expressed keen interest in funding off-the-grid independent power producers in Zimbabwe. This comes as Government is pushing for power self-sufficiency by 2020.

Zimbabwe produces 1 434 MW from its installed hydro-powered and thermal stations and relies on regional imports to meet peak demands.

Zimbabwe Energy Council (ZEC) director Panganayi Sithole who met an IFC team for the second time last week told Business Times that the institution is ready to invest in various power projects.

“It’s the second time since May 7, 2018 that the IFC team has come to Zimbabwe. This shows a high level of commitment for investing in the country’s power sector.

“IFC are engaging Government on potential power projects that they want to carry out in various farms and mines to lessen the encumbrance on the main power grid. The Energy Ministry is in the process of identifying potential areas,” said Sithole.

Sources said nearly $100 million has been set aside to bankroll these projects.

The (IFC) team also met with key stakeholders in sector which included Rural and Electrification Fund, Honey and Blanckenburg, Samsco, ZETDC, banking sector and private sector through ZEC.

Government expects to give IFC feedback by month end so that the team may begin its groundwork in August.

Sithole said if off-grid power plants are successfully implemented, there is higher expectation of speeding up rural electrification .

Off-grid energy systems are standalone systems (usually on solar) that help households, commercial and industrial buildings, mining sites, and the telecom sector to generate their own power and are not connected to the grid.

Globally, the latest trend gaining momentum in the market is Growing Pay-As-You-Go (PAYG) model. Over the past several years the need to improve energy access has been a crucial agenda across the world, especially in developing countries. The continuous decline in decentralized renewable technology cost, such as solar PV and energy storage, has improved the affordability of off-grid technologies, thus playing an important role in accelerating the energy access. However, building and sourcing financing for renewable-based mini-grids can be expensive in some countries, which has given rise to a new business model called Pay-As-You-Go (PAYG).

Over the past eight years, the World Bank Group has committed $1.3 billion to off-grid programs – mostly based on solar technologies – in developing countries around the world, with a focus on communities in Sub-Saharan Africa and South Asia, which are home to the largest populations without access to electricity, according to a recent report on the institution’s blog.

The IFC being the private sector financing arm of the World Bank took time is studying the architecture, size and operations of the energy sector in Zimbabwe. In addition, IFC sought to understand past private sector initiatives and programs and the barriers and opportunities in off-grid sector.

IFC has invested $265 billion in financing for businesses in developing countries, especially Africa since 1956.

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