Positive news for Marondera solar project

MARONDERA- Progress will soon be made by De Green Rhino Energy (Pvt) Limited which
is working to establish and operate a 50 MegaWatt solar photo-voltaic power plant at
Rufaro Farm in Marondera after Independent Power Producers (IPPs) recently met
Government officials to see to discuss funding modalities of such projects.
The projects by IPPs have failed to take-off due to a lack of funding, shortage of
foreign currency, Government Guarantees, the capacity of the Zimbabwe Electricity
Transmission and Distribution Company (ZETDC) and the currency of transactions.
Most of them, including De Green Rhino Energy, applied for Project Implementation
Agreements (PIAs) to the Ministry of Energy and Power Development after Finance
and Economic Development Minister Professor Mthuli Ncube announced that the
Marondera Solar Farm is among the solar power projects that will benefit from such
agreements.
The PIA has three major components namely Project Development Support
Agreement (PDSA), Power Purchase Agreement (PPA) and the Reserve Bank of
Zimbabwe (RBZ) Undertaking for Foreign Currency Convertibility and Transfer.
The guarantees will cushion solar power projects that range from 5MW to 100MW
and a cumulative capacity of 998MW at a cost of $1 billion and will speed up the
Independent Power Producers (IPPs) installations.
The Ministry of Finance and Economic Development also said it is willing to speed
up investments by Independent Power Producers (IPPs) in the energy sector with a
special focus on solar projects.
Projects that shall be considered for the Government Guarantee are those that are
under construction, those that are about to reach financial closure and those that are
yet to commence construction.
Although at least 100 IPPs in the energy sector have shown an interest to get
support, Chaminuka News is reliably informed that the Government has trimmed the
figure to less than 10, with only those whose documentation is up-to-date set to get
the support.
De Green Rhino Energy director Francis Gogwe who attended the IPPs financing
indaba with officials from the Ministry of Finance, Zimbabwe Energy Regulatory
Authority (ZERA) and the Insurance and Pensions Commission (IPEC) said they had
a fruitful meeting which is expected to unlock some of the major bottlenecks, mainly
funding, that have been stalling the solar projects.

The indaba was also attended by officials from the Reserve Bank of Zimbabwe
(RBZ), Commercial Bank of Zimbabwe (CBZ), Infrastructure Development Bank of
Zimbabwe (IDBZ), Zimbabwe Association of Pension Funds (ZAPF), Insurance &
Pensions Commission (IPEC) and Intensive Energy Users Solutions (IEUS), formerly
IEUG.
He said the country was facing significant electricity deficits and as such the
government had opened up space in electricity generation to end the Zimbabwe
Power Company (ZPC) monopoly. This had culminated into the licensing by ZERA of
more than 100 IPPs, mainly solar Photo-Voltaic.
“The energy regulator has, however, expressed serious concern at the failure of the
majority of the projects to reach financial close. The IPPs are currently contributing
two percent of the country’s energy requirements thus prompting ZERA to engage
stake holders to unpack the challenges they are facing.
“A majority of IPPs have been able to develop their projects to the PPA stage but
have failed to secure tentative term sheets prompting ZERA to organising a financing
indaba that included all the relevant stakeholders and IPEC who are involved in all
the solar PV projects that are currently operational,” he said.
Gogwe added that the meeting was fruitful and IPPs, including De Green Rhino
Energy were now looking forward to the implementation of plans and programmes
that were agreed upon.
“Most solar projects have been failing to take-off as previously planned as there is a
lack of funding and unclear currency of transactions, among other challenges.
Officials from the ZERA stated that the regulator is willing to change the approval
processes of PPAs notwithstanding protecting customers’ interests and the policies
of Government, the renewable energy component in particular will be considered,”
he said.
ZERA also undertook to create a conducive environment for funding of power
projects for them to resume so that they can help overcome power shortages faced
by the country.
Among other recommendations, the IPPs were advised to seek private off-takers so
that they may negotiate US$ PPAs. The IEUS said they represent mining houses
and other exporters who are able to pay in US$. Seven companies that were
selected for implementation agreement, including De Green Rhino Energy, will be
guaranteed payments in US$.
The INDABA agreed that ZETDC was not capacitated to take up power from all the
IPPs. The cost on a base case scenario is 10,6billion which ZETDC cannot afford
currently.
Since ZETDC is not capacitated grid-wise, IPEC will begin the process of exploring
ways to invest in the electricity highway.
A few months ago, De Green Rhino Energy was given its Environmental Impact
Assessment (EIA) by the Environmental Management Agency (EMA).

The certificate permits the company to operate in accordance with Part XI of the
Environmental Management Act (Chapter 20:27) and was one of the few requisite
documents for the company.
The company will bring job opportunities to the people of Marondera, infrastructural
development and a consistent supply of electricity as Zimbabwe aims to achieve an
upper middle-income economy by 2030.