The Infrastructure Development Bank of Zimbabwe (IDBZ) says it is shelving two solar power projects of a combined 45MW because of ZESA’s poor transmission infrastructure.
IDBZ will no longer pursue the 15MW Tjibundule solar project in Plumtree, whose estimate cost is US$23 million. The bank has also abandoned plans to set up the 30MW Gwayi Solar Project, which had been projected to cost US$45 million.
“The Bank has noted that inadequate transmission and distribution infrastructure will negatively affect the scaling up of renewable energy projects across the country. Grid Impact Assessments have shown that existing substation and transmission infrastructure will not be able to accommodate some of the Bank’s planned solar projects…hence the Bank’s decision to shelve them,” says IDBZ CEO Zondo Sakala.
Some “alternative suitable sites for the implementation of the envisaged solar projects” are now being looked at, IDBZ says in its latest half-year financials.
While Zimbabwe is scaling up investment in generation capacity, there has not been equal investment in replacing aged transmission infrastructure. This may further hurt new energy investment, already limited by the country’s currency and regulatory hurdles.
According to a report in 2019, ZESA loses almost 20% of its power due to aged transmission and distribution infrastructure.
Solar projects are among IDBZ’s priority infrastructure investment areas. While the Plumtree and Gwayi projects have stalled, IDBZ is still invested in the 50MW Rufaro Farm solar project at Longlands Farm outside Marondera. The bank is also investing in a 20MW plant in Gutu, as well as minihydros on the Osborne and Odzani rivers.
In July, IDBZ received accreditation to the Green Climate Fund (GCF), which helps in channelling investment in renewable energy.
The bank, like many other local and foreign investors, is facing frustrating red tape in its attempts to get projects off the ground.
“Completion of project preparatory work is also being delayed by the time needed to obtain the required regulatory approvals,” the bank says.
The bank needs the equivalent of US$2.5 million to prepare and start developing the projects that it has targeted as priorities in 2021.
“In the outlook, the Bank is buoyed by positive economic prospects, macroeconomic stability, an increased focus on infrastructure investment by Government,” says IDBZ.