Zimbabwe is committed to overcoming its energy deficit through pro-business policies that encourage investment, Energy and Energy Development Minister Edgar Moyo said.
Minister Moyo stated this at the 9th Africa Support Summit 2024, which concluded yesterday in Washington, DC, United States.
The summit focused on developing energy projects, infrastructure and the enabling environment, under the slogan: “Capital flows support the energy transition.”
African sponsors, facilities, organizers and delegates were selected among others from Egypt, Ethiopia, Sudan, Zimbabwe, Malawi, Senegal, Eswatini, Djibouti and Sao Tome and Principe.
The conference included discussions on the impacts of lowering loan costs, seeking alternatives to sovereign guarantees, and unlocking climate finance pledged for Africa’s energy industry.
Minister Moyo gave a presentation on the potential impact of debt cost reduction and different approaches to sovereign guarantees.
“The lower cost of debt enhances the return on investment and attracts foreign investors to the sector. Financial stability reduces pressure on utilities because when the cost of debt is very high, there is a lot of pressure on utilities and then there is a lot of disruption.”
“With more independent power producers able to provide affordable energy, national utilities can reduce their fiscal deficits. Improving utility performance leads to competition from independent power producers and can lead to efficiency gains in the electricity sector.”
The minister said Zimbabwe was working to create a more business-friendly environment.
“In the case of Zimbabwe, the government has finalized risk assurance mechanisms through what we call the Government Implementation Agreement, and just last week we issued these agreements to potential developers in the private sector.
“These energy sector reforms create an enabling environment that allows for increased private sector participation in electrified infrastructure development through improved efficiency, allowing for effective cost recovery, including connectivity costs and increased accountability reforms that would include regulatory accounting frameworks for tariffs, and tariff review methodologies.” Energy planning, electricity planning structure, and everything related to it.
“An appropriate regulatory policy framework would enhance the independence of energy regulation. For example, in Zimbabwe we have what we call the Energy Regulatory Authority of Zimbabwe which regulates the sector – promoting accountability, fairness, transparency, viability and affordability between suppliers and consumers.
The delegation’s participation confirms the Second Republic’s dedication to finding sustainable solutions to its energy-related problems.
The conference also focused on the critical financial aspects needed to develop Africa’s energy sector more effectively, with talks rooted in reducing the cost of debt and innovative solutions to the sovereign guarantee dilemma.
African Development Bank Vice President for Electricity, Energy, Climate Change and Green Growth, Dr Kevin Kariuki, said: “To address energy poverty on the continent, the international community must rely more on empirical evidence of risks rather than perceived risks.
“The risk of default in Africa is lower than anywhere else in the world, so we should only use realistic risks, not expected risks,” he declares.
