In line with the drive to remove barriers to investment in the energy sector, the Second Republic has opened up the area for more private businesses to minimise power shortages through investments that will enhance generation with a new 50MW solar station in Bulawayo and a major upgrade of the national grid in Bikita.
The Zimbabwe Investment and Development Agency (ZIDA) recommended two investments that will see Zesa’s distribution arm, ZETDC, benefiting from extra infrastructure and Bulawayo City Council benefiting from a solar power station that it will eventually own, both from private investors.
Speaking after yesterday’s Cabinet meeting, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said ZIDA had recommended a transmission grid deal between ZETDC and Bikita Minerals to expand the 132 kilovolt grid to increase access to power for those in the area around the mine as well as providing the power for expanding the mine and increasing its output for the investor.
“The partnership between the Zimbabwe Electricity Transmission and Distribution Company and Bikita Minerals entails the company financing the construction of a 113km 132 kilovolt power line from the existing Tokwe substation to the proposed Bikita Minerals substation.
“It will also include the construction of a new 132kV Bikita Minerals substation, installation of substation ancillary services, protection equipment, metering equipment, power network control and telecommunication system as well as the reconfiguration of the new Bikita Minerals substation and network so that it supplies power to other ZETDC clients, such as Gonye, Nyika, Chivake and Bikita local load,” she said.
Minister Mutsvangwa said Bikita Minerals would recoup its investment through using power to be supplied by ZETDC over five years while the electricity infrastructure would be handed over to ZETDC upon completion of the construction.
A feasibility study submitted to ZIDA confirmed that the deal was financially viable.
“Benefits of the project include employment creation as 400 more people will be employed at the Bikita Minerals plant during construction and operation of the expanded plant and unlocking of economic benefits to Bikita Minerals’ value chain industries as the company works with them during construction and operation of the expanded mine,” the minister added.
The rapid growth and expansion in mining and industry, coupled with new investment across sectors has increased demand for power. However, this has created a mismatch between electricity demand and supply, hence causing serious shortages.
President Mnangagwa recently said his Government was seized with accelerating the entrance of new investors to enhance power generation from non-hydropower sources as a way of climate-proofing electricity generation.
ZIDA also recommended the partnership between Bulawayo City Council and Williams Engineering, which will establish a 50 megawatt solar power plant at Ncema Farm.
“The partnership involves a build-operate-own-and-transfer arrangement over a concession period. The project will address the perennial power challenges at the Bulawayo water pumping station and also provide power to the city’s critical installations thereby reducing the council power bill,” said Minister Mutsvangwa.
She said the power plant would also create 200 jobs during construction and 40 jobs during its operation, provide dedicated power to Bulawayo industries in the designated special economic zones and provide an alternative revenue stream for Bulawayo City Council.
Meanwhile, the Government has continued to support robust industrialisation through the development of 10 value chains for rapidly transforming the economy structurally.
Minister Mutsvangwa said the country’s industrial sector was highly diversified, comprising 94 sub-sectors which produce 6 000 products, notwithstanding the disruptive exogenous factors experienced recently.
“The manufacturing sector contribution to GDP had increased from 15,7 percent in 2019 to 18,4 percent in 2021, with manufactured exports growing from US$383 million to US$404 million. Industrial capacity utilisation rebounded from 47 percent in the fourth quarter of 2020 to 66 percent in the similar quarter of 2021. Shelf-space occupancy has correspondingly increased from 55 percent in 2021 to the current 80 percent.
“Furthermore, manufacturing sector employment has increased by 1,4 percent during the first quarter of 2022 compared to the similar period of 2021. NSSA data indicates that employment in the manufacturing sector grew from 1.3 million in October 2021 to 1.4 million in June 2022,” she said.
Improvement in the performance of the manufacturing sector had been noted in the food and beverages sub-sector, fertiliser industry, and the pharmaceuticals sub-sector.
The metals and electrical sub-sector had also recorded improved performance through key investments such as the Dinson Iron and Steel Company project in Manhize, which will produce 1,2 million tonnes of steel and create over 10 000 jobs through an investment of US$60 billion.
“In the dairy sub-sector implementation of the 5-year dairy sector development plan is being accelerated, and production of raw milk has so far increased from 79,6 million litres in 2021 to the current 83 million litres.
“The sugar industry has excess milling capacity which stands at around 600 000 tonnes per annum, while refining capacity is 240 000 tonnes per annum. The Sugar Act is being reviewed to consider sugar as a strategic crop, while engagements are being undertaken with key stakeholders to promote new investments and players in the sector,” added Minister Mutsvangwa.