Tax incentives, net metering and other policy reforms are making Zimbabwe’s renewable energy sector increasingly attractive to investors, as the government steps up efforts to expand clean power generation and improve electricity security.
Energy and Power Development permanent secretary Gloria Magombo said policy interventions introduced over the past few years were encouraging greater private sector participation in renewable energy projects.
Speaking at the Energy Forum for Africa conference in Harare recently, Magombo said Zimbabwe’s renewable energy policy targets a significant increase in the contribution of clean energy to the country’s electricity mix.
“In particular within the renewable energy space we have developed a renewable energy policy,” she said.
“The policy sets out the various targets to say by 2030 we expect that 29 percent of the energy mix within Zimbabwe will be from renewable energy sources excluding large hydro.”
She said government had complemented the policy with fiscal incentives under the amended Public Finance Management Act, including tax holidays for renewable energy projects and duty-free imports of equipment used to install renewable energy systems.
According to Magombo, the measures have lowered project costs and improved the investment climate for both local and international investors.
Government has also expanded ZESA Holdings’ net metering programme, allowing households and businesses with solar systems to export excess electricity to the national grid and draw power when their own generation is insufficient.
In addition, renewable energy projects have been granted prescribed asset status, enabling pension funds and insurance companies to provide long-term financing.
“We have seen our government pension funds NSSA, the Old Mutuals have done a lot of work and funded locally our renewable energy projects from small hydro to large solar projects,” Magombo said.
The incentives come as businesses and households increasingly invest in solar systems to reduce dependence on the national grid and contain rising electricity costs.
According to the Zimbabwe Energy Regulatory Authority, solar independent power producers generated 232MW last year, accounting for about 7,8 percent of the country’s electricity consumption.
Magombo said improved generation from Kariba Power Station, Hwange Power Station and renewable energy projects had also strengthened electricity supplies.
She said ZESA had recorded more than 200 consecutive days of uninterrupted electricity supply.
Meanwhile, regional power trader Greenco Zimbabwe managing director Lion Mashiri called for greater harmonisation of electricity trading regulations across Southern Africa to promote private sector investment.
“One of the reforms we would like to present to the government is the harmonisation of third-party access,” Mashiri said.
“I would encourage ministers and policymakers to harmonise, not necessarily make it exactly the same, but to ensure that as power moves across the region, what sellers or buyers of power face in one country is precisely the same in the next country or at least predictable.”