Foreign Currency Challenges Completion of Zimbabwe’s First 5MW Solar Project

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  • Zimbabean IPP, Solgas Energy, is set to commission a 5MW solar power plant at Hwange, Zimbabwe in August this year. 
  • This was announced by Solgas founder, Mr Tafadzwa Muchinda
  • The fixed ground mount solar PV plant will be the biggest solar plant constructed in Zimbabwe to date.
  • The project has already created over 300 jobs for local communities.
  • Funding has been a challenge.

Work on the construction of the 5MW plant at Cross Mabale in Hwange, is at an advanced stage despite Covid-19 induced delays and difficulties in accessing foreign currency.

“After reaching full financial closure in February 2018, we had expected to commission the project by end of May, but because of Covid-19 inspired delays, not just in the country but outside as well like in China and South Africa, where we import most of our equipment like the top tier Seraphim panels, we have had to push that up to end of August,” said Mr Mundicha during a media tour of the facility recently.

Solgas Energy secured US$7m for the construction of the 5MW solar plant, but Mr Mundicha said it was difficult to access foreign currency from the Reserve Bank of Zimbabwe until February this year.

They we granted national project status and received a lot of assistance from the Government.

“We are exempt from duty and we also have a status, which allows us to raise money from pension funds and insurance companies. The company is wholly Zimbabwean and the money is also from Zimbabwe. We are trying to do away with the idea that you need foreign investment all the time you want to start a project in the country. Right now we have raised this US$7m locally and we are playing our small part in reducing the national import bill for electricity. The power that we are going to generate from here will go into the national grid. We have a 25-year power purchase agreement with ZETDC,” said Mr Mundicha.

“We are happy with the progress and the issue has never been about our ability to do the work. Once the funds are secured to pay our suppliers, the rest is easy for us and as you can see (the interview was done at the Hwange site) construction is ongoing albeit with limited staff because of Covid-19 measures. If you came here in February, this was just a bush but by August, we will be commissioning,” he said.

The company quarantined its on-site workers for 21 days, seven days more than the recommended 14, because of Covid-19 and that lost them some production time.

The Solar PV Plant has a total ultimate valuation of US$130million and Mr Mundicha said they have reached financial closure for a further two projects valued at US$100 million, which are to go live by the end of 2021.

The project is set to benefit the Hwange community with over 300 already employed at the site.

“We are focusing on Impact Investments through Renewable Energy and Infrastructure Development with a social responsibility to uplift disadvantaged communities out of poverty. We will actively look for ways to support the local community through provision of electricity and education initiatives and we will try to start with the school next door. Over 300 people are already employed here from the Hwange community,” said Mr Mundicha.

He added that they are on a journey to partner with youths and women as disadvantaged groups in the process imparting knowledge on how to develop and structure sustainable projects and companies of tomorrow aligned with SDGs and climate change initiatives.

As part of social responsibility, SolGas has also undertaken to clear 28km of the power line for the first 5MW and expect to reach 81km as the project grows.

Cross Mabale, Hwange 5 MW Solar Plant Details: 

  • 5MW AC ground fixed mount solar plant in Cross Mabale, Hwange
  • Fully licenced by the Zimbabwe Energy Regulatory Authority (ZERA licence number GC0046/2016)
  • 100 hectares of land secured for future expansion to an 88MW solar plant
  • Grid Impact Assessment successfully completed with ZETDC
  • Transmission interconnection agreement signed with ZETDC
  • Environmental Assessment Studies completed and filed
  • 25 Year Power Purchase Agreement secured with Zimbabwe Electricity Transmission & Distribution Company
  • Granted National Project Status by Ministry of Finance and Economic Development Zimbabwe
  • Granted Prescribed Asset Status by Ministry of Finance and Economic Development Zimbabwe 
  • Tariff Agreed

Author: Bryan Groenendaal


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