InfraCo Africa invests to pioneer Zimbabwe’s first project financed solar IPP

15th July 2024

Harare, Zimbabwe: Private Infrastructure Development Group (PIDG) company, InfraCo Africa, has signed an agreement with Energywise Equipment (Pvt) Ltd (Energywise) and Impala Power Company Ltd (Impala), investing US$1.5m to progress development of the 30MWac Vungu Solar project in the country’s Midlands Province. Vungu Solar is poised to become Zimbabwe’s first internationally project financed solar Independent Power Producer (IPP).

InfraCo Africa’s Head of Business Development, Omar Jabri, said, “We are proud to be working with local developer, Energywise, and the team at Impala to progress this pioneering project which aligns with PIDG’s commitment to improving energy production and access in countries with access gaps. Vungu Solar will deliver 30MWac of additional clean power to Zimbabwe’s national grid, promoting sustainable economic development without jeopardising the country’s climate goals. By piloting the government’s standardised project documentation, Vungu Solar also has the potential to transform the Zimbabwean energy market by unlocking further private sector finance for solar IPPs in the future.”

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 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 (PPA), Government Project Support Agreement, and central bank undertaking, the details of which are being negotiated with Vungu Solar.

Culven Chipfumbu, Director, Energywise Equipment said, “The solar power plant will produce 30MWac of electricity which is equivalent to carbon equivalent emission savings of c.75,000 tonnes per annum, a significant contribution to Zimbabwe’s Intended Nationally Determined Contributions to the reduction of carbon emissions. Vungu Solar intends to be gender sensitive and disability inclusive in its staff recruitment plan.”

Managing Director of Impala Power, Paul Webb, added, “As well as contributing directly to the vital expansion of power generation in Zimbabwe, we hope that Vungu Solar will pave the way for the international financing of all renewable energy projects in the Ministry of Energy’s project pipeline. By ensuring the availability of clean electric power to households and industry, this would provide a massive boost to Zimbabwe’s socio-economic development.”

The project will contribute towards delivery of SDG 7 – Access to affordable clean energy – and SDG 13 on climate action.

Having advanced negotiations with Zimbabwe Electricity Transmission and Distribution Company around a bankable 25-year PPA, Vungu Solar is expected to pilot the use of the country’s new standardised documentation. It is anticipated that the pilot will enable the government to attract future private sector investment to grow the country’s renewable energy sector.

Notes for Editor:

• As lead developer on the project, InfraCo Africa brings its experience of structuring bankable IPPs in frontier markets to the project, as well as its expertise in developing projects to international health, safety, environmental, social, and business integrity standards, and of raising project finance.

• Zimbabwe has an electrification rate of 49%i, with the majority of grid-connected customers being concentrated in urban areas.

• Zimbabwe’s installed generation is largely reliant upon hydro and coal.

The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of pioneering, partnership, safety, inclusivity and urgency. PIDG offers Technical Assistance for upstream, early-stage activities and concessional capital; its project development arm – which includes InfraCo Africa and InfraCo Asia – invests in early-stage project development and project and corporate equity. PIDG credit solutions include EAIF (the Emerging Africa Infrastructure Fund), one of the first and more successful blended debt funds in low-income markets; GuarantCo, its guarantee arm that provides credit enhancement and local currency solutions to de-risk projects; and a growing portfolio of local credit enhancement facilities, which unlocks domestic institutional capital for infrastructure financing. Since 2002, PIDG has supported 233 infrastructure projects to financial close, which provided an estimated 228 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Global Affairs Canada, Germany, and the IFC. www.pidg.org

InfraCo Africa: InfraCo Africa is part of the Private Infrastructure Development Group (PIDG) and seeks to alleviate poverty by mobilising investment into sub-Saharan infrastructure projects. It does this by investing directly into early-stage projects and by providing development leadership. Through its investments arm, InfraCo Africa can also provide equity to close a financing gap and start construction or fund innovative solutions that need support to scale-up, to pilot new products or enter new markets. InfraCo Africa is funded by the governments of the United Kingdom (through FCDO), the Netherlands (through DGIS) and Switzerland (through SECO). www.infracoafrica.com

Energywise Equipment Ltd (Energywise) is a developer of on-grid and off-grid solar power plants that enable its customers to generate clean, affordable energy. Energywise is committed to developing reliable, adaptable, and affordable solutions that cut energy costs and is developing a number of projects in the Midlands and Matebeleland provinces of Zimbabwe. www.energywise.co.zw

Impala Power Company Ltd (Impala): Impala Power Company is a Xago Africa project vehicle. Xago Africa is a developer of renewable energy projects and agribusiness ventures intended to support sustainable socio-economic development in Africa by expanding the availability of electric power for households and industry, and by promoting agribusiness ventures that incorporate processing and manufacturing to stimulate value addition and job creation.