Zimbabwe: Vungu Solar
Pioneering Zimbabwe’s first internationally project financed solar IPP
Challenge
Zimbabwe has an electrification rate of 49%, with the majority of grid-connected customers being concentrated in urban areas. With growing demand from industry and domestic consumers, the gap between energy supply and demand is growing. The country’s installed generation is largely reliant upon hydro and coal. The Government of Zimbabwe (GoZ) is keen to diversify the country’s energy mix and to attract international project finance and expertise to the country’s renewable energy sector.
Solution
InfraCo Africa has partnered with local developer, Energywise Equipment (Pvt) Ltd (Energywise) and Impala Power Company Ltd (Impala) to develop Zimbabwe’s first internationally project financed solar Independent Power Producer (IPP). Located in Midlands Province, Vungu Solar will add 30MWac of new, renewable energy to the Zimbabwean grid, supporting efforts to meet growing demand for clean energy and displacing diesel back up generation for homes and businesses. The project is also well positioned as part of the strategic corridor for the Southern Africa Power Pool (SAPP).
Vungu Solar was selected by the Government of Zimbabwe as its preferred bidder in a national pilot programme designed to develop a suite of standardised documentation to be used by future solar IPPs in the country. With support from the Africa Legal Support Facility, the Ministry of Energy and Power Development prepared a standardised Power Purchase Agreement, Government Project Support Agreement, and central bank undertaking, the details of which have now been negotiated with Vungu Solar.
As lead developer on the project, InfraCo Africa brings its experience of structuring bankable IPPs and raising project finance in frontier markets as well as expertise in developing projects to international health, safety, environmental, social, and business integrity standards.
It is anticipated that, by piloting the viability of Zimbabwe’s new standardised documentation for solar IPPs, Vungu Solar will not only deliver much-needed renewable energy but will enable the country to attract further private sector investment into its growing renewable energy sector.
Being developed by InfraCo Africa, Energywise and Impala.
