WATCH OUT: Chasi warns IPPs sitting on laurels

By Tendai Sahondo

Government will soon revoke the licences of none performing Independent Power Producers (IPPs), energy and power development minister, Fortune Chasi has warned.

Speaking today at the IPP listing masterclass hosted by the Zimbabwe Stock Exchange (ZSE) today, Chasi said the Zimbabwe Energy Regulatory Authority (ZERA) has issued 77 licences to IPPs with most of them either sitting idly on the licenses or selling them to secondary bidders for a higher price.

“As of 31 July 2019, ZERA has issued more than 77 power generation Licences, 70 of these are Independent Power Producers while 42 alone are for solar power projects. However we are now serious about implimentation of these anticipated projects. We will soon be looking at dormant licenses and revoking them for non-perfomance. We want to do away with speculative behaviour. Some license holders paid close to nothing for the licenses and now want to sell them for a furtune, that is not acceptable. IPPs should have a clear timeline as to when they expect to start production,” he said.

The 42 licensed solar projects have a combined capacity of 1285MW, four are currently operational while the rest of the 38 are under development.

Government has also licensed four operational biomass projects with a total capacity of 92.8MW, comprised of 3 Bagasse/Thermal projects and 1 Wood waste project which mostly generate power for own use, however excess power is banked in the Zimbabwe Electricity Supply Authority (ZESA) Grid.

In addition to this, there is a total of 6 licensed Coal projects which are under development at the moment with a total capacity is 4560MW, these include the PER group venture with a capacity of 2000MW in Binga and the China Africa Sunlight Energy project with a capacity of 600MW in Gwayi.

Furthermore, government has licensed a total of 10 Small Hydro Power operational projects with a potential of feeding 31.326MW into the grid.

Chasi urged IPPs to explore funding opportunities through the ZSE, furthernore he said there is an opportunity to avail green bonds to help fund the licenced IPP projects.

On the tariif increase discourse, Chasi said a tarrif increase is imminent as investors need to be confident that the power that will be fed into the grid by IPPs will be paid. He said he will soon do the uncovential by advertising for ZESA board members as evereything rises and falls on management. Chasi further called for Zero tolerance to corruption in the energy sector.

Speaking at the same event, ZSE Chief Executive Officer, Justin Bgoni said urged IPPs to go public as this has the potential to unlock financial doors.

“The ZSE is keen for qualifying IPPs to have access to the ZSE platform to raise capital to further their business in terms of research, infrastructure and expansion. As a result, this will boost investment credibility on their business,” he said

He said the bourse is set to sign a Memorandum of Understanding with the Botswana Stock Exchange to augment its capital raising initiatives.

 

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