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Power cuts: Govt moves to save industry

Zimbabwe is facing probably its worst electricity crisis in history with 18-hour load-shedding by Zesa

According to recent reports, companies are losing between US$150 million and US$250 million in production time due to the power cuts.

The government recently announced that it was in the process of creating an escrow account where companies that generate foreign currency can ring fence
electricity imports.

Energy and Power Development permanent secretary Gloria Magombo (GM) told our business reporter Tatira Zvinoira (TZ) in an interview that the scheme will also
be open to companies that do not earn foreign currency.

Magombo also unpacked the proposed renewable energy policy being drafted by her ministry to address Zimbabwe’s electricity shortages.

Below are excerpts from the interview.

TZ: So that I understand you, this ring-fencing means a company that generates forex can put money in an account, which is used to guarantee it regular power
supply?

GM: Even those that don’t earn forex, they can pay the equivalent by going to the forex market and get more to cover.

You see, everyone will be able to play in that area. But, it is a temporary relief strategy for these guys to continue operating so that we stop this loss you
are talking about.

TZ: How much power are you planning on getting from this ring-fencing?

GM: We are targeting about +/- 400 megawatt (MW) from the ring-fencing.

TZ: Information Communication Technology minister Kazembe Kazembe recently said that he is working on getting mobile operators to install solar units at their
base stations to guarantee power supplies. What is your ministry doing to ensure that electricity shortages don’t interrupt operations of telcos?

GM: The immediate relief from the ring-fencing will deal with additional capacity to be available to everyone else.

So, the supply situation is bound to improve in the short-to-medium term and we want to continue improving it by giving liquidity to Zesa and allowing them to
bring in more capacity, not just from imports, but from their own generation capacity.

The process is on-going. But we also believe that in the medium-to-long-term, it is important that these base stations are powered through alternatives and we
would want to support the process of alternatives.

We would also want them to consider various funding options like access to green funds so that (alternatives) are made much more affordable.

It is important that we do that because with the energy transition it can be done and everyone has a place to play in this solution.

It is not about them saying “we are dealing with our base stations only” it is also about households as well and a lot of them have already started putting their own small rooftops (solar panels on rooftops) to back up.

We have supported that through a net metering programme to say that investment does not go to waste because when the power is there you can still supply
further to the grid then at night you draw from the grid.

TZ: Can you please give us an update on the crafting of a renewable energy policy by your ministry?

GM: It has gone through the first phase of presentation within Cabinet committees and it should be approved in the next few weeks.

But, what you have to know is that a lot of the initiatives and incentives that are in that policy were incorporated into the financial amendment of the
Finance Act two years ago.

So some of the things that are in the policy have already been actioned and are on the ground as we speak.

I had a meeting with the Renewable Energy Association of Zimbabwe to ask what the requirement gaps are, if there are any, so that they can request us to put in
place and push the process of the implementation of these renewables to make it faster.

We are aware of some of them because of this energy crisis have also increased their prices beyond the reach of people.

So whilst solar is there, we need everyone to play their part to make products affordable to the populace so that the adoption can be faster and those are some
of the things we are talking about.

It is not the time to make a killing. It is about using the opportunity to ensure that the renewable energy targets are also met earlier.

Don’t forget that rooftops on their own if we have about one million rooftops with one kilowatt, we can have 100MW. Do you understand?

TZ: Yes.

GM: It is not just about the big ones, which supply the grid, even the small ones contribute towards 2 300MW (in renewable energy generation), which we want by
2030.

TZ: How much investment in the renewable energy sector is envisaged in the policy?

GM: I might not have the figure off hand but if you look at part of the rural electrification programme, we were looking at about $3 billion for us to meet a
certain level of access within the country.

But, we can work on the figure and I can give it to you for the 2 300MW.

TZ: Why is the process to introduce the policy moving slowly?

GM: It is not moving slowly.

TZ: Since 2017?

GM: I only joined the ministry last year and I have already gone through the first phase of the proposals. So I think we have been moving very fast.

My target is that by early (this month) we should be doing the launch after adoption.

It is only that it is a process, which needs to be taken. Since joining the ministry, it has been my priority, and remains my priority, within my first year
that it should be done.

We also want to go on to introduce competitive procurement through auctions.

So in the background there is a lot of work, which we are doing that will come together with that launch. It is not like people are sitting and waiting for the
launch, no.

TZ: How much is Zimbabwe consuming in petrol and diesel?

GM: It had gone up at one time to over four million litres for diesel and we are now sitting on about plus or minus three million a day now.

For petrol, it is almost around two million thereabouts, but that is the blended petrol.

TZ: So, consumption has gone down?

GM: Yes. It has gone done, however, we also want to recognise that we are in a constrained environment.

So in a constrained environment it is very difficult to measure the final demand we are looking at.

TZ: How is the shortage of foreign currency impacting on the availability of fuel in the country?

GM: What is happening is that fuel procurement is mainly done through letters of credit, which are done through the Reserve Bank of Zimbabwe. So forex still
remains a challenge.

However, it is very clear that we have put in various mechanisms for those who can buy with their own funds.

We are saying for example a mine, which is exporting has the capacity to use its own forex to import fuel in bulk because the yellow machines use a lot of
fuel.

That option also brings relief because the government can concentrate on making sure we have sufficient fuel for public transport and also for private use.

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