KEY POINTS
- Foreign investment is crucial for developing Zimbabwe’s renewable energy resources, especially in solar and hydropower.
- The government has implemented policies to create a favorable environment for international investors in the energy sector.
- Challenges such as bureaucratic hurdles and policy inconsistencies need to be addressed to fully leverage foreign investment.
Foreign investment is still an essential factor influencing the growth of energy sources in Zimbabwe, including renewable and non renewable resources.
The “open for business” policy that was adopted by the government in 2018 has helped the country attract foreign investment to support the development of the energy sector.
Renewable energy initiatives
Zimbabwe has been at the forefront of the search for foreign investors regarding the exploitation of renewable energy, especially solar and hydropower.
According to the Ministry of Energy and Power Development, direct foreign investment is required to strengthen the sector.
Dr. Gloria Magombo, the Permanent Secretary of the ministry, noted that, even though local funding has launched several renewable projects, foreign investments are needed to advance the process.
In line with this, the government has identified potential sites near Norton, Mashonaland West Province, for a 100-megawatt solar power station.
This project is a collaboration between the Zimbabwean government and independent investors from Belarus, operating under the independent power producer model with a 25-year power purchase agreement with the Zimbabwe Electricity Distribution Company.
Policy framework and investment climate
The Zimbabwe Investment and Development Agency Act also authorizes the Zimbabwe Investment and Development Agency (ZIDA) to grant investment licenses to investors with or without the country’s origin.
The legislation in this aspect has the intention of establishing a friendly environment for the participation of foreign investors in the energy sector
That said, there are still difficulties here.
Potential investors from other countries have reported that they are experiencing some challenges with bureaucratic procedures and that some policies are not consistent, these are some of the factors which act as pull factors in the country.
Solving these problems is critical to optimizing the effects of foreign investment in Zimbabwe’s energy sector.
Conclusion
The indication of investment from other countries continues to form a strong pillar in the expansion of the energy sector in Zimbabwe.
Thus the work continues, especially in the case of renewable energy projects, though much progress has been achieved regarding the investment climate.
By fostering a stable and transparent environment, Zimbabwe can continue to attract the foreign capital necessary to achieve its energy goals and ensure sustainable economic growth.
