News / National
Zimbabwe govt brokers EU power deals as blackouts unsettle economy
30 May 2025 at 12:16hrs | Views
The Zimbabwean government is actively facilitating partnerships between local independent power producers (IPPs) and European Union (EU) investors to secure much-needed funding for critical energy projects, amid a worsening power crisis that continues to disrupt economic activities across the country, the Zimbabwe Independent has learnt.
Businesses in Zimbabwe face persistent power outages as electricity supply remains unreliable. The country's peak electricity demand exceeds 2,000 megawatts (MW), yet generation capacity fluctuates between 1,000 MW and 1,400 MW. This shortfall is mainly due to operational challenges at Kariba South Hydro and Hwange thermal power stations.
At Kariba, generation is severely impacted by declining water levels linked to climate change, while Hwange struggles with aging infrastructure and chronic underinvestment, problems compounded by shortages of foreign currency.
Energy and Power Development permanent secretary Gloria Magombo confirmed the government's commitment to addressing the crisis during an interview at the inaugural EU-Zimbabwe Business Forum in Harare, where energy investment was a key agenda item.
"We are here to encourage our own private sector to look for partners and look for funding from different international funders who are coming as part of the European Union delegation. I was happy to see that the EU has always said that they have funding to support the private sector," Magombo said.
She explained that the forum aimed to connect Zimbabwe's private sector with EU investors, highlighting opportunities while also addressing risk mitigation strategies. "Some are looking for loans, and some are looking for equity partners," she noted.
The Intensive Energy Users Group, a consortium of local IPPs, holds a portfolio of proposed generation projects worth 16,000 MW spanning solar, coal, and hydroelectric power. However, accessing financing for these projects remains a significant hurdle.
"In this particular case, we are looking at energy. The EU said they already have programmes, and renewable energy is one of the sectors where they want to participate. We are happy, and we will continue to see what else can be done," Magombo added.
She emphasized the government's readiness to present energy solutions and urged the market to mobilize players capable of both buying and selling power domestically and regionally.
Local IPPs have long voiced concerns over insufficient financing, which continues to stall energy development. John Diya, senior manager for electricity trading and system operations at Zimbabwe Electricity Transmission and Distribution Company (ZETDC), highlighted the continued instability of Kariba's output due to fluctuating water levels. Last season, the dam held only 1.79% usable water, roughly equivalent to 25cm across its surface. Current levels hover around 14%, offering some hope if inflows continue.
However, Diya warned that Kariba alone cannot meet national electricity demand, underscoring the need for diversified power generation.
Meanwhile, the Zimbabwe Electricity Supply Authority (ZESA) has grappled with mounting debt. A recent parliamentary report revealed that ZESA resorted to exporting electricity to generate foreign currency necessary to service debts owed to Chinese firms, even as local power shortages persist.
The parliamentary committee report from February stated that ZESA's loan burden for renovations at Kariba South Power Station amounts to US$350 million. It highlighted concerns over poor loan servicing, inflated project costs, and high tariffs. The report called on Treasury to disburse funds promptly to ease debt servicing pressures and improve Zimbabwe's creditworthiness, which is vital for accessing affordable financing for future power projects.
Kariba's expansion, completed in 2018, cost US$550 million, while Hwange's recent revamp, commissioned in 2023, came at a price tag of US$1.4 billion.
As Zimbabwe navigates these financial and infrastructural challenges, the government's push to link local IPPs with EU funding partners represents a critical step towards stabilizing the country's energy sector and reviving economic growth.
Businesses in Zimbabwe face persistent power outages as electricity supply remains unreliable. The country's peak electricity demand exceeds 2,000 megawatts (MW), yet generation capacity fluctuates between 1,000 MW and 1,400 MW. This shortfall is mainly due to operational challenges at Kariba South Hydro and Hwange thermal power stations.
At Kariba, generation is severely impacted by declining water levels linked to climate change, while Hwange struggles with aging infrastructure and chronic underinvestment, problems compounded by shortages of foreign currency.
Energy and Power Development permanent secretary Gloria Magombo confirmed the government's commitment to addressing the crisis during an interview at the inaugural EU-Zimbabwe Business Forum in Harare, where energy investment was a key agenda item.
"We are here to encourage our own private sector to look for partners and look for funding from different international funders who are coming as part of the European Union delegation. I was happy to see that the EU has always said that they have funding to support the private sector," Magombo said.
She explained that the forum aimed to connect Zimbabwe's private sector with EU investors, highlighting opportunities while also addressing risk mitigation strategies. "Some are looking for loans, and some are looking for equity partners," she noted.
The Intensive Energy Users Group, a consortium of local IPPs, holds a portfolio of proposed generation projects worth 16,000 MW spanning solar, coal, and hydroelectric power. However, accessing financing for these projects remains a significant hurdle.
"In this particular case, we are looking at energy. The EU said they already have programmes, and renewable energy is one of the sectors where they want to participate. We are happy, and we will continue to see what else can be done," Magombo added.
She emphasized the government's readiness to present energy solutions and urged the market to mobilize players capable of both buying and selling power domestically and regionally.
Local IPPs have long voiced concerns over insufficient financing, which continues to stall energy development. John Diya, senior manager for electricity trading and system operations at Zimbabwe Electricity Transmission and Distribution Company (ZETDC), highlighted the continued instability of Kariba's output due to fluctuating water levels. Last season, the dam held only 1.79% usable water, roughly equivalent to 25cm across its surface. Current levels hover around 14%, offering some hope if inflows continue.
However, Diya warned that Kariba alone cannot meet national electricity demand, underscoring the need for diversified power generation.
Meanwhile, the Zimbabwe Electricity Supply Authority (ZESA) has grappled with mounting debt. A recent parliamentary report revealed that ZESA resorted to exporting electricity to generate foreign currency necessary to service debts owed to Chinese firms, even as local power shortages persist.
The parliamentary committee report from February stated that ZESA's loan burden for renovations at Kariba South Power Station amounts to US$350 million. It highlighted concerns over poor loan servicing, inflated project costs, and high tariffs. The report called on Treasury to disburse funds promptly to ease debt servicing pressures and improve Zimbabwe's creditworthiness, which is vital for accessing affordable financing for future power projects.
Kariba's expansion, completed in 2018, cost US$550 million, while Hwange's recent revamp, commissioned in 2023, came at a price tag of US$1.4 billion.
As Zimbabwe navigates these financial and infrastructural challenges, the government's push to link local IPPs with EU funding partners represents a critical step towards stabilizing the country's energy sector and reviving economic growth.
Source - Zimbabwe Independent
