Foreign investors shun energy sector

HARARE - The Zimbabwe Energy Council says foreign investors shied away from the country’s energy sector last year despite injecting close to $3 billion in the region due to high political risk.

The council’s chairperson Amiel Matindike said 2017 was a difficult year in terms of funding of projects — both small and big.

“The risk level for Zimbabwe as a destination for cost-effective money was very high. No significant inflows of foreign direct investment was recorded. Sadc region received close to $3 billion in 2016-2017 in form of private sector investment in the energy sector.

“Regrettably, the country did not receive any form of traceable private sector investment in the sector,” he said.

He noted that many of Zec members, who are independent power producers (IPPs), bear testimony that it has been very difficult to convince funders on the various licensed projects.

“It has been surprising that even the Chinese investors, whom we thought were our all-weather friends have been wary to invest in the country. We are confident that with the new economic order, a new lease of life will be breathed into the sector,” he said in a market update.

“I call upon our members to take advantage of various business meetings to participate in crafting new strategies and plans to resuscitate the funding opportunities,” Matindike added.

The latest development comes at a time when the country is experiencing acute power shortages due to lack of investment in the energy sector.

Zimbabwe, which requires close to 2200 megawatts (mm) of power daily but generates slightly above 1000MW, relies on archaic electricity generating equipment dating back to the Rhodesian era.

On its part, the government has been working with Chinese firms to upgrade the existing infrastructure as a way of boosting power generation.

Energy minister Simon Khaya Moyo recently said power generation at Hwange Thermal Power Station has increased to 661 megawatts following the completion of refurbishment works at one of its units which had been inactive for years.

Moyo said Hwange’s unit six, which had been under refurbishment, was now up and running.

“It has been years since we last had such an output (661MW),” Moyo said

Hwange is Zimbabwe’s biggest power plant by design capacity and is made up of six generating units which at intervals require overhaul to maintain its efficiency.

The plant was first constructed in 1973 and was generating about 500MW against its installed capacity of 920MW due to technical issues and its advanced age. — The Financial Gazette


 

Comments (1)

All-weather friend does NOT mean stupid friend. Business is business!!

Jonso - 5 February 2018

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