Zera, ZETDC iron out proposed private sector power retail deal

The Zimbabwe Energy Regulatory Authority (ZERA) and the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) are working on modalities to operationalise the government's plan to open up the electricity retail market to private companies.

The initiative, announced last week, will allow licensed private firms to buy electricity from producers - including Zesa Holdings and independent power producers (IPPs) - for resale directly to households and businesses within designated zones.

ZERA chief executive officer Edington Mazambani told NewsDay Business that consultations were underway to finalise the implementation framework.

"The modalities of how this will roll out are still in process. The regulator and the utility are working on this," Mazambani said.
"The move aims to attract investment in electricity secondary distribution infrastructure in terms of Section 44 of the Electricity Act, with a focus on improving efficiency in the supply of electricity to households."

The reform seeks to accelerate universal access to electricity by 2030 and ease pressure on ZETDC by allowing private operators to invest in transmission and distribution networks, particularly in underserved areas.

Under the proposed system, potential licensees will be required to demonstrate both technical and financial capacity to develop, operate, and retail electricity while adhering to statutory and regulatory standards.

Collaboration between ZETDC and private licensees will involve sharing electricity backbone infrastructure - including transmission lines and substations - to support new residential and commercial developments.

Mazambani said the arrangement was expected to stimulate infrastructure growth and promote renewable energy integration while reducing the government's financial burden.

"It is envisaged that new investments will facilitate rapid infrastructure development, with reduced costs to government, while integrating renewable energy sources into the national grid," he added.

Zesa Holdings previously indicated it requires about US$2 billion in capital to stabilise supply and upgrade infrastructure. Allowing private sector participation is therefore seen as a key step toward mobilising additional resources.

Zimbabwe's peak electricity demand currently exceeds 2 000 megawatts (MW), but generation fluctuates between 1 200MW and 1 400MW due to capacity constraints at Kariba and Hwange power stations.