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Tuesday, May 28, 2024

Renewable energy sector welcomes financial guarantee scheme

Story by Tichaona Kurewa

PLAYERS in the renewable energy sector have welcomed the financial guarantee scheme for Independent Power Producers (IPPs) that has been introduced by the government.

The financial guarantee scheme for IPPs is meant to unlock critical funding for renewable energy projects by mitigating risk for investors and paving way for a more sustainable and reliable energy future for Zimbabwe.

The Permanent Secretary in the Ministry of Energy and Power Development, Dr Gloria Magombo announced the new development at the official opening of the International Renewable Energy Conference and Expo in Victoria Falls this Friday.

“To this end, the government has been working with the Africa Legal Support Facility (ALSF) and has developed a standardized Government Implementation Agreement (GIA), titled the “Government Project Support Agreement” (GPSA), which will guarantee bankability of investments in the renewable energy sector. The GPSA is intended to provide comfort through guaranteeing a cost reflective tariff, the uptake of power, as well as the offshore repatriation of funds by the investors.”

Experts and beneficiaries of the financial guarantee said the move is a masterstroke in the country’s energy development.

De Green Rhino CEO, Mr Francis Gogwe said, “This will certainly expedite construction of our projects, and this will also create jobs for Zimbabweans. We are thankful to the government for this opportunity.”

“This financial guarantee scheme is a game-changer for Zimbabwe’s energy sector. By providing investors with greater security, we are unlocking the potential for significant investment in renewable energy, diversifying our energy mix, and reducing our reliance on fossil fuels,” said Hermit Sustainability Advisory representative, Engineer Charles Murove.

The Minister of Energy and Power Development, Honourable Edgar Moyo pledged continued government support towards the adoption of renewable energy sources.

“It is important for us to have robust policy interventions and mechanisms to promote renewable energy, energy efficiency and energy conservation. We are glad Your Excellency to announce that we have tendered our National Energy Efficiency Policy to Cabinet for approval.”

Funding has been the elephant in the room for IPPs, which has prompted the government to chip in for the development of IPPs, which will jointly contribute 271MW to the national grid.

IPPs issued with the Government Project Support Agreement include De Green Rhino Solar Project, Acacia Solar Project, Guruve Solar Energy and Par Value Solar Energy.

The selected companies will benefit from a capped tariff of US$9c/kWh for solar energy, regardless of the capacity, due to the drop in solar technology prices in late 2023.

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