How is the power sector in Zimbabwe set up?
ZESA Holdings is the state power group. Its subsidiary Zimbabwe Power Company (ZPC) runs the main power stations. Zimbabwe Electricity Transmission and Distribution Company (ZETDC) runs the grid and sells power to customers.
The Zimbabwe Energy Regulatory Authority (ZERA) licenses generators, including IPPs, and regulates tariffs. Zimbabwe is a member of the Southern African Power Pool (SAPP), so it trades power with its neighbours.
Key projects and programmes
These are public, well-documented examples from the sources below. They show how the market works.
- Kariba South hydro power station on the Zambezi, run by ZPC. Its output depends on water levels in Lake Kariba, which is shared with Zambia.
- Hwange thermal (coal) power station. Units 7 and 8 were commissioned in August 2023 and added about 600 MW to the grid.
- Licensed solar IPPs, many of them selling to ZETDC or to large users such as mines.
How are projects financed?
Large state plants have often been financed with loans from export credit agencies and state banks, for example Chinese lenders for the Hwange expansion. Private IPPs usually combine sponsor equity with loans from local banks and DFIs, backed by a power purchase agreement (PPA).
Foreign currency is a key issue. Lenders want to know whether the off-taker pays in US dollars or local currency and whether the project can convert and move money out of the country.
What should investors, lenders, and off-takers check?
Common checks include:
- The credit quality and payment record of the off-taker, whether ZETDC, a mine, or another large user.
- The currency of the PPA and the rules on converting and sending money abroad.
- Drought risk for hydro, and how it affects grid supply and the off-taker's finances.
- Licences from ZERA and grid connection terms.
- Sanctions screening. In March 2024 the United States ended its Zimbabwe sanctions program and designated some people and entities under the Global Magnitsky program instead. Check current US, UK, EU, and UN lists for every party.
Where does Vektron Merchants fit?
Zimbabwe is one of the six countries covered by the Vektron Merchants African Gateway. Vektron Merchants is a marketing agency for energy, commodities, infrastructure financing and industrial firms. We find buyers, offtakers, lenders and partners for companies in these four industries, and we secure meetings with the people who sign.
Frequently asked questions
Who regulates electricity in Zimbabwe?
The Zimbabwe Energy Regulatory Authority (ZERA).
Can private companies sell power in Zimbabwe?
Yes. Independent power producers can generate and sell power with a licence from ZERA, usually under a power purchase agreement with ZETDC or a large user.
Are there US sanctions on Zimbabwe?
The Zimbabwe-specific US sanctions program ended in March 2024, but some people and entities are designated under the Global Magnitsky program. Every party should screen against current lists.
Sources
Related
General information, not investment, legal or tax advice. Facts are from the public sources listed and may change.