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Sunday, May 26, 2024

Government energy sector reforms pay off

Story by Owen Mandovha

THE Second Republic has made huge strides in creating an enabling environment to attract transformative renewable energy projects.

This has resulted in the signing of a 100-megawatt solar energy project involving a government-owned Chinese company.

Local energy group, LA Africa Holdings this Monday signed a massive 100-megawatt solar energy contract with renowned Chinese firm CEEC Energy group which is expected to roll out the project within 90 days.

The project is so far the largest solar energy project to be undertaken by an independent power producer, thanks to the government’s recent measures to incentivise the implementation of alternative energy projects.

La Africa Energy Chief Executive Officer Mr Linos Masimura said, ‘‘The need to diversify Zimbabwe’s energy mix is paramount hence our partnering with CEEC of China which has got extensive experience in carrying out similar projects in Africa.’’

CEEC Energy Group Deputy General Manager, Mr Chen Bo cited Zimbabwe’s extensive opportunities in the energy sector as a major driver in partnering LaAfrica on the massive project.

Mr Bo noted, ‘‘We are a state-owned company and Zimbabwe possesses many opportunities which saw us partnering with LA Africa to implement this project. We are going to be the project implementers and we seek to be partners in boosting Zimbabwe’s economy.’’

Representing Energy and Power Development Minister Honourable Soda Zhemu was Chief Director in the Ministry, Engineer Ben Munyaradzi who confirmed that the Implementation Agreement is now in place to eradicate risks faced by investors.

Hon Zhemu said, ‘‘Earlier this year, we made it possible to de-risk these projects by coming up with measures that allow investors to make returns that are sustainable. This was by way of the GIA, which gives commitment by the government to make guarantees on several aspects that have been stalling these projects including access to foreign currency by investors to repay their loans.’’

Engineer Munyaradzi also noted that access to foreign currency to repay loans and remit dividends is a key ingredient in promoting the rolling out of such massive projects.

The government’s launch of a metering system, where independent power producers are paid for supplying power to the national grid, has stirred a lot of interest from investors and ensured a move from the past, where prospective investors would obtain licences for speculative purposes.

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