Zimbabwe Power Tariff Hike Sparks 3,000 MW of Energy Investments

Zimbabwe’s decision to adopt tariffs that reflect costs has sparked a wave of investments in the energy sector that will help ease its power crisis.

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Published Nov 19, 2024  •  2 minute read

Electricity pylons near the Hendrina coal-powered power station, operated by Eskom Holdings SOC Ltd., in Middelburg, South Africa, on Tuesday, Dec. 26, 2023. Coal-fired power plants operated by South Africa's state utility are emitting pollutants that primarily cause respiratory diseases such as asthma at almost 42 times the intensity of those in China. Photographer: Waldo Swiegers/Bloomberg Photo by Waldo Swiegers /Bloomberg

(Bloomberg) — Zimbabwe’s decision to adopt tariffs that reflect costs has sparked a wave of investments in the energy sector that will help ease its power crisis.

Since the switch in December last year, energy investments have sharply increased with 3,000 megawatts of projects currently under development, according to Zimbabwe Electricity Supply Authority Chairman Sydney Gata. 

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“Immediately after the tariffs were corrected, we called in industry, mining in particular and told them that now they can also invest in electricity infrastructure,” Gata told delegates at an energy summit held Tuesday in the resort town of Victoria Falls. 

Miners were told to stop expecting the government to underwrite the energy risk for their operations, he said. “To our surprise there was a lot of positive response.” 

Projects that are expected to come online next year include the refurbishing of coal-fired plants by Jindal Steel and Power Ltd., and solar power facilities by Tsingshan Holding Group Co.’s Afrochine Smelting Ltd. and PPC Ltd.

They should help end hours-long outages that have worsened because of a severe drought, which had limited hydro-electricity generation at the Kariba dam, which is the nation’s main source of energy. 

The Kariba power station is currently generating a 10th of its installed capacity of 1,050 megawatts. As at Nov. 16 total generation in the southern African nation was 1,189 megawatts, almost half of demand.

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High demand from the mining sector has also contributed to the shortfall. The industry is experiencing average annual growth of 9% spurred by lithium, coal, iron and steel, Zimbabwe Chamber of Mines Chief Executive Officer Isaac Kwesu said at the same event. 

“As we are talking right now our sector demands approximately 700 megawatts and the projections from the survey that we did we anticipate that in the next three to five years we will be requiring about 2,000 megawatts, which is above what the country is currently generating.”

Zesa expects power cuts to end late next year and imports to stop in 2026, according to its roadmap. Zimbabwe imports electricity mostly from neighboring Mozambique and South Africa’s Eskom Holdings SOC Ltd. 

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—With assistance from Godfrey Marawanyika.

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