Monday, May 16 2022 Sign In   |    Register

News Quick Search



Front Page
Power News
Today's News
Yesterday's News
Week of May 09
Week of May 02
Week of Apr 25
Week of Apr 18
Week of Apr 11
By Topic
By News Partner
Gas News
News Customization


Pro Plus(+)

Add on products to your professional subscription.
  • Energy Archive News

    Home > News > Power News > News Article

    Share by Email E-mail Printer Friendly Print

    Zimbabwe Power Competitive Landscape

    January 24, 2022 - Fitch Solutions Sector Intelligence


      THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

      Zimbabwe Power Competitive Landscape

      • 24 Jan 2022
      • Zimbabwe
      • Power

      The overall power sector in Zimbabwe is dominated by the state-owned Zimbabwe Electricity Supply Authority Holdings (ZESA Holdings) and its subsidiaries, Zimbabwe Power Company (ZPC) and the Zimbabwe Electricity Transmission and Distribution Company (ZETDC). The majority of generation, transmission and distribution comes through ZESA Holdings.

      ZESA Holdings was meant to be unbundled following the Electricity Act of 2002, and although it was restructured to include its subsidiaries, ZPC and ZETDC, the unbundling was stopped by the government in 2013. The government announced that, should any unbundling occur, whichever utilities were to take over, it would still be 100% government-owned.

      Independent power producers are allowed to participate in the private sector, but, under former president Robert Mugabe, the Zimbabwean government's threats of nationalisation and a general insecure operating environment have kept most investors away. Added to that, the Indigenisation and Economic Empowerment Act, which requires private corporations to cede 51% ownership to indigenous Zimbabweans or government bodies, has been a limiting factor in private sector investment over the past decade. However, towards the end of 2017, President Emmerson Mnangagwa stated that the government intended to amend the indigenisation law to allow 100% foreign ownership in all sectors except for diamond and platinum mining. In early 2018, the indigenisation law was scrapped for nearly all sectors, including the power sector, eliminating one of the country's most significant non-tariff barriers and opening the market up for new foreign direct investment.

      Under the former president, government intervention was reportedly high in the sector, with the Zimbabwe Electricity Regulatory Authority allegedly having seen constant government interference, especially with regard to the setting of tariffs, despite the Electricity Act stating that it has 100% independence.

      Paving The Way For Renewables

      Notable changes in Zimbabwe's non-hydropower renewables regulations came about in early 2020. In March 2020, the government launched the National Renewable Energy Policy which aims to reduce red tape and streamline the licensing and approvals processes required of renewables investors in the market. While there are few quantifiable targets currently published at the time of writing, we note that the creation of a specific policy agenda aimed at increasing the ease and reducing the cost of renewables investment in the country bodes well for renewables growth in the years to come.

      In addition, Zimbabwe's government announced in early 2020 that the country had reached an agreement to participate in the International Finance Corporation's Scaling Solar programme, which has proved highly successful in attracting private solar power investment in Zambia in the recent past. We expect that the combined effects of these changes will increase private renewables investment and increase overall competitiveness in Zimbabwe's power sector over the coming years.

      This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.


    Other Articles - International


       Home  -  Feedback  -  Contact Us  -  Safe Sender  -  About Energy Central   
    Copyright © 1996-2022 by CyberTech, Inc. All rights reserved.
    Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.