The United Nations Development Programme (UNDP) Energy offer investor forum has roared to life in Harare today with stakeholders from various stakeholders converging to discuss the important issue.
In his keynote address, while officially opening the forum, Hon Zhemu Soda, the Minister of Energy and Power Development, said the event gives is a platform where investors and those with potential projects intend to have a renewed approach in accelerating energy transition for SGD achieved in Zimbabwe.
He hailed the willingness of Zimbabwean people and companies to come together and improve the power situation in the country by proposing and investing in projects that align with the Ministry’s mandate.
He highlighted the current state of Zimbabwe’s Energy sector. The minister said according to recent statistics, the Country has an electricity penetration rate of 54%.
“As Government, we are not proud of this figure considering that we have a large number of people, particularly in rural areas who lack access to modern energy services. In fact, electricity access levels in rural areas are below 20% with the balance available to urbanities. Although we have seen increased penetration of small portable solar systems, our challenge remains that of funding new projects to increase access to modern energy in order to achieve universal access by 2030.
“It is undesirable to indicate that the country has a power supply deficit which accounts for load shedding experienced especially during peak hours. We often have a peak power demand of 1700MW against an achievable power generation in the range of 1200 – 1400MW. We also import power from our neighbors in the SADC region at a huge cost in order to address this supply-demand gap,” Hon Zhemu said.
The national economic blueprint which is the National Development Strategy 1 (NDS1) demands that the country embarks on a transformative approach to the provision of energy and power services to all sectors of the economy. The projected growth that will lead the country into an upper middle-income economy requires a clear roadmap on how the energy needs of the growing economy will be met.
The condition of the existing energy infrastructure requires urgent attention. For this reason, the government has resolved to upgrade the Energy Generation, Transmission, and Distribution networks during the course of the National Development Strategy NDS1 programme.
There is a need to expand the energy generation facilities together with reinforcing the transmission and distribution infrastructure in order to reduce losses on power incurred through the wheeling of electricity.
Hon Zhemu alluded to the issue of climate change that is topical worldwide. Zimbabwe as a nation has been severely affected by this phenomenon in power generation as evidenced by the reduced water levels at Kariba since the end of last year. Platforms like this are crucial in challenging thoughts and proffering possible solutions to the effects of Climate change. In order to stand the test there is a need to have a proper energy mix such that if one is affected other generators can assume the load.
One of the goals of the COP 26 was to raise or mobilize USD$100 billion in every Climate year so that it can be channeled towards adaptation and mitigation activities. This is in line with the target to reduce the global temperature from where it is to less than 1.5 degrees Celsius or below.
According to the World Energy Outlook report, rapid transitions are solely dependent on the investment being committed to individual countries. It also subscribes to the need by countries to invest in the energy sector in order to reduce the risk of energy price spikes, volatility, and failure to attain net zero by 2050.
He said while it is encouraging that Governments take the lead, funding is beyond public financing. The Energy Ministry is fully aware that “Alone one can go fast; but together, we can go far”. Hence its commitment to working with progressive partners and investors who wish to invest in the energy sector. The UNDP is one of the development agencies that the government is working with as the country strives to achieve SDGs.
The Ministry of Energy’s partnership with the UNDP and other UN agencies dates back a long way such as:
- The World Solar Summit of 1996 and the subsequent GEF programme of solar home systems for households that was done around the year 2000
- The development and Launch of Renewable Energy and Biofuels Policies in 2019
- The current Solar for Health Programme for rural clinics and many others initiatives I shall not mention here.
- The Energy Offer” which is funded to the tune of USD1.5 million.
“The Zimbabwean Government alone cannot achieve our desired goals. However, as policymakers we try to ensure the environment is conducive for Investments as evidenced by improvement in policies we put in place as engagements and assistance is required from various stakeholders for us to achieve the net zero targets as alluded to in the submitted NDCs.
“We have set the Renewable Energy target for Zimbabwe based on analysis of Nationally Determined Contribution (NDC) objectives for Green House Gas emissions, demand-supply scenario, the ability of utilities to pay for such power, and the marginal increase in tariffs of end-user consumers. The government continues to improve the environment, and recently, in an effort to de-risk investments has come up with GIA.”
In remarks at the same meeting, the UNDP Resident Representative, Verity Nyangah, said the forum is part of greater efforts to create an interactive platform for stakeholders involved in the energy sector and noted that the biggest challenge of our time is to fight climate change.
The UNDP representative emphasised the need to ensure the transformation of the global energy system towards a low-carbon and net-zero emission pathway that is fast enough to achieve the Paris Agreement and Sustainable Development Goals (SDGs) and leave no one behind.
“The need to transform energy systems has further been put into focus by current energy challenges that our country and region, in general, is facing which is putting significant pressure on our current energy generating systems. This, however, presents a fundamental chance for all of us to rethink energy towards cleaner, more secure, efficient, resilient, and inclusive systems.
“As you all know, renewable energy is becoming increasingly important for economic development in our country. We need clean, reliable sources of energy in order to power our industries and homes, reduce pollution, and create jobs. The global and Zimbabwe’s energy systems must be reinvented if we’re going to address climate change, poverty, and inequality. The figures from the 2022 National Census shows us that 34% of the Zimbabwe population relies on energy from National and Local Mini-Grid; 28% from off-grid electricity sadly 38% have no form of electricity or energy source,” she said
Already, Zimbabwe is in the process of implementing National Development Strategy 1 whose success rests upon necessary catalysts being exploited such as renewable sources.
Renewable energy has tremendous potential to drive economic growth, reduce poverty and improve the standard of living in the country.
Estimates show that the world requires at least US$1 trillion in investment in energy infrastructure by the year 2030. Given the upfront costs required for the development and deployment of renewable energy, multiple sources of funding are required, including public and private sources.
In order to attract this investment into Zimbabwe, the resident representative said there is a need to create an enabling environment, bring together stakeholders, and de-risk investments in renewable energy so that the country can reach the targets set in the National Renewable Energy Policy, NDS1 and also the NDCs.
The UNDP’s Renewed Strategic Offer in Africa, or “Africa Promise”, aims to “strengthen UNDP’s position as Africa’s premier enabler and integrator for the 2030 and the 2063 Agendas”. Affordable and sustainable energy constitutes one of the six Strategic Impact Areas of UNDP’s Africa Promise, focusing on energy interventions as enablers of development. RBA’s Africa Promise pledged to provide at least 100 million people with access to Energy by the end of the current Strategic Plan.
UNDP has pledged to catalyze knowledge, innovation, partnerships, and finance to provide sustainable, affordable, and reliable energy to additional 500 million people by 2025, especially for those hardest to reach and in crisis contexts.
At the Global level, UNDP has been implementing the Derisking Renewable Energy Investment (DREI) framework which systematically identifies the barriers and associated risks which can hold back private sector investment in renewable energy.
Through this framework, it assists policymakers to put in place packages of targeted public interventions to address these risks. Each public intervention acts in one of three ways: either reducing, transferring, or compensating for risk.
The overall objective of the DREI Framework is to cost-effectively achieve a risk-return profile that catalyses private sector investment at scale. The end result is reliable, clean, and affordable energy solutions across developing countries.
Achieving SDG7 – clean, affordable, reliable energy for all, requires a massive upfront investment to help countries modernize or build the energy infrastructure of the future. The UN, financial institutions, and governments cannot do it alone and must focus on enabling increased commercial capital flows to developing economies.
UNDP has responded to this call to be the integrator between Government, Development Agencies, and Private Sector as envisaged through the UNDP Energy Offer project that was launched by the Honourable Minister in April 2022 during the Zimbabwe International Trade Fair.
To date in Zimbabwe, the Energy Offer project in partnership with the Rural Electrification Fund is revitalizing the 100kw Mashaba solar mini-grid. The system will supply power to two irrigation schemes, 15 businesses, clinics, schools, and community water pumping schemes.
The project is also installing a new 120Kw solar mini-grid in Dete, Hwange in partnership with the Rural Electrification fund who contributed through the construction of a 4.6km of distribution network. This plant will benefit at least 80 beneficiaries inclusive of 30 businesses, village households, primary and secondary schools, churches, and community boreholes.
The UNDP Energy Offer is installing 9 Solar Energy Kiosks in Mashaba and Dete Communities. This intervention will contribute to green jobs and employment creation. The kiosks offer an opportunity for small businesses in the selected areas to implement income-generating activities.
This Investment Forum brings regional and national investors and project developers and enterprises to a platform of interaction. The event presents an opportunity for participating investors or financiers to have access to a pipeline of projects developed in Zimbabwe under the Energy Offer Project and beyond as well as projects with proven sustainable business models.
Project developers will have a unique opportunity to start conversations and secure connections for financing successful projects and innovative business models through bilateral meetings. Participants will gain valuable insights from expert-led discussions and dialogues on current investment and financing conditions for renewable energy projects.
UNDP Energy Offer 1st Investment Forum will identify optimised action points for a renewed approach towards accelerated energy transition and closing the energy access gap in Zimbabwe for SDG achievement through green investment. This will pave way for regular renewable energy technology-specific investment forums in the future.