Govt revokes licences of 6 dormant IPPs

By Staff reporter | 18 Jul 2019 at 12:06hrs
ZIMBABWE Energy Regulatory Authority (Zera) has so far cancelled six licences of non-performing Independent Power Producers (IPPs).

This comes after Energy and Power Development minister Fortune Chasi asked Zera to examine the status of each licensed project, to establish challenges being faced and to examine which licence holders are keeping them for "speculative purposes".

"To date, 10 projects have been found to be under-performing as they have failed to achieve project milestones and we have cancelled six of those," Zera acting chief executive officer Eddington Tapera Mazambani said.

Mazambani added that Zera continuously monitors project implementation for the licensed power generation projects through quarterly reviews based on reports submitted by IPPs and if they are satisfied that there is unjustified pilgrimage around the implementation of the projects then the necessary action is taken in the form of cancelling the licences.

A total of 13 IPPs were licensed in 2019 and only one is currently operational.

In addition to that one, there are 16 other projects licensed in the previous years that are operational.

In recent years, the country liberalised its energy sector in a bid to promote the participation of private capital but the majority of the projects have failed to take off.

"The projects have been affected by difficulties in accessing finance for project preparation and development stages. Accessing of funding is being affected by the prevailing adverse macro-economic environment characterised by lack of foreign currency, currency risk, poor creditworthiness of the off-taker Zimbabwe Electricity Transmission and Distribution Company (ZETDC)," Mazambani said.

Mazambani further said investors were finding it difficult to commit themselves as they doubt that they will be able to recover their investment.

"As Zera we try to assist IPPs by referring them to investors who may avail with funding through the ministry of Energy and Power Development, lobby the ministry of Finance and Economic Development to grant national project status for deserving projects," Mazambani said.

Zera has licensed 51 IPPs in the last five years in a bid to boost electricity generation in the country.

According to Zera, in 2018, IPPs generated 313GWh which contributed three percent of total electricity generated.

This comes at a time when the country has been hit by severe power shortages following a sharp decline in water levels in the Kariba Dam due to erratic rains in the 2018-19 rainfall season, generation constraints at Hwange Power Station because of ageing equipment and government's failure to pay outstanding debts to external power suppliers resulting in limited power supply.



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