Zimbabwe consortium seeks US$3 billion for power transmission project

The Intensive Energy User Group (IEUG), a local power consortium, is calling for over US$3 billion in investment over the next five years to enhance transmission infrastructure and address power imbalances in Zimbabwe. The IEUG, which represents the largest consumers of electricity in the country, is working to connect areas of power surplus with regions experiencing significant deficits.

The IEUG's Chairperson, Eddie Cross, made the announcement during the 2024 Africa Investment Forum Market Days in Morocco, where he presented a major renewable energy initiative - the Kariba Floating Solar Project. This ambitious project aims to generate 1,000 megawatts (MW) of solar power in four phases of 250 MW each. Cross emphasized the need for substantial investment in both the generation and transmission of electricity to meet regional demand.

The Africa Investment Forum, hosted by the African Development Bank, is a key platform that supports the progression of projects to bankable stages, facilitating capital raises and accelerating deals to financial closure. Cross highlighted the IEUG's role in ensuring reliable power supply to Zimbabwe's domestic market, with its member companies, primarily from the mining sector, accounting for about 40% of the country's total power demand.

"We have formed a voluntary association of the largest consumers of power in the country," Cross said. "A group of companies, the majority of which are mining companies, has undertaken to work together to provide the resources and the demand for power in our country."

Cross explained that the IEUG has already formed three subsidiary companies, one focused on power trading, another on power generation, and a third dedicated to transmission and distribution. He outlined the pressing need for investment in transmission infrastructure, estimating that over the next five years, the consortium would need US$3 billion to facilitate the movement of power from surplus regions to deficit areas.

"We estimate that in the next five years, we have to invest US$3 billion in transmission to enable us to move power from areas of surplus to areas of deficit," Cross said.

This transmission investment is seen as critical to meeting the energy demands of the region, especially given the growing industrial activities in regions such as the Congolese and Zambian Copper Belt, which are set to produce a substantial portion of the world's copper in the coming years. Cross pointed to the development of power lines stretching from Angola to Congo and from Tanzania to Zambia as essential to addressing these energy needs.

In addition to transmission, Cross highlighted the consortium's strategy to operate in US dollars, a move sanctioned by the government. This allows the IEUG to service external liabilities and manage foreign transactions more efficiently. He noted that customers prepay in US dollars, which allows the group to pay international suppliers in foreign currency without encountering exchange rate challenges.

"We have a bank account in Botswana, and our clients can choose to be paid from there if they want. We have a collection account run by Standard Bank, which is the largest bank in Africa," Cross added. "For the last 18 months, we've had absolutely no problems from an exchange rate perspective or from an operational point of view in this environment."

The IEUG's plans also include the development of 6,000 MW of new hydroelectric power production, further diversifying Zimbabwe's energy mix and reducing reliance on traditional sources of power. These efforts aim to alleviate the country's energy deficits and support continued industrial and economic growth.

The Kariba Floating Solar Project and the planned investment in transmission infrastructure reflect Zimbabwe's commitment to energy self-sufficiency and a more sustainable future, with the IEUG playing a central role in the country's energy transformation.