Zimbabwe Independent Power Producers (IPPs) have been urged to enter into power purchase deals with local exporters as such contracts are more profitable, an official said.
Currently, state power utility Zesa Holdings remains the major off-taker of the power produced by IPPs, but concerns over poor tariffs have partly slowed the implementation of the projects due to viability concerns.
Most IPPs are producing power for their own use and offloading excess onto the national grid.
“As we work towards addressing issues to do with a standard power purchase agreement, which address some technical issues and off-take arrangements and Government Implementation Agreement, we encourage the IPPs, especially those involved in renewable energy to enter into off-take agreements with exporters,” Energy and Power Development secretary Eng Gloria Magomba said.
The Government has already engaged the Africa Legal Support Facility (ALSF) and international consultants to come up with an implementation agreement for renewable energy projects in a bid to attract investment into the sector.
The implementation agreements set out terms on, which Governments provide incentives and assistance to the prospective projects awarded to investors. The Government agreement will address issues to do with political risks, payment default risks and general Government support such as provision of land to renewable developers.
ALSF is an international organisation hosted by the African Development Bank in Abidjan, Côte d’Ivoire. It was established in December 2008 by the African Development Bank at the request of African countries and became operational in 2010.
