Staff Writer
Zimbabwe has launched a US$45 million Renewable Energy Fund, aiming to accelerate the country’s transition to renewable energy sources and increase access to electricity in off-grid areas.
The Renewable Energy Fund is a result of collaboration between various ministries in government, UN organisations including UNESCO, UNDP, UN Women among others, and the private sector led by Old Mutual.
The fund comes at a time when access to affordable, clean, reliable and sustainable energy is critical for the transformation of human lives and economies.
Speaking at the launch today, Permanent Secretary in the Ministry of Energy, Gloria Magombo, emphasised the fund’s crucial role in achieving Zimbabwe’s renewable energy targets.
“The US$45 million Renewable Energy Fund will go a long way towards increasing the share of renewable energy mix in the grid and also increase energy access in off-grid areas,” Magombo said.
The National Renewable Energy Policy set a target of adding 2100MW of renewable energy capacity by 2030, representing 26.5% of the country’s energy mix. Magombo said the establishment of the Renewable Energy Fund is a key milestone in realising the goal.
“More importantly, the Policy clearly pronounces that a Green Fund responsible for funding renewable energy and energy efficiency projects shall be established. Thus, this Fund is a key milestone in the implementation of our Renewable Energy Policy,” she said.
She said the Fund is part of the resource mobilisation that is crucial for achieving the country’s renewable energy targets.
Magombo highlighted that currently, power generation is about 1300MW against a peak demand of about 1700MW with the difference supplemented through power imports.
She said Zimbabwe has been severely affected by climate change in power generation, highlighting the importance of diversifying the power generation sources.
She said Zimbabwe’s Nationally Determined Contribution mitigation projects are largely based on renewable-based interventions such as solar PV, solar thermal, micro and mini-grids, biogas, wind and biofuels.
Magombo highlighted that the challenge remains that of funding as most of these projects are at their infant stages or the feasibility stage.
“It is critical at this point to note that the energy transition to a green economy is a process that requires favourable funding conditions and low-cost capital. Failure to invest in the renewable energy sector will result in the country depending more on the fossil fuels,” he said.
“Clean energy investment in developing countries like Zimbabwe has remained suppressed since the ushering in of the Paris Agreement. Energy investment in developing countries is a hundred times higher as compared to advanced and developed economies. Borrowing costs are also high for developing countries hence financing challenges are many in countries like ours. Hence, we look forward to favourable borrowing conditions from the Renewable Energy Fund which has local funding sources.”
The Renewable Energy Fund is designed to finance and develop local renewable energy projects, initiatives, and technologies, aligning with Zimbabwe’s goals to meet its Sustainable Development Goals (SDGs).
Specifically, the Fund targets SDG 7 on affordable and clean energy, SDG 9 on industry, innovation and infrastructure, and SDG 11 on sustainable cities and communities.
Old Mutual chief executive officer Samuel Matsekete, said the Fund brings together partners such as Old Mutual, the Government of Zimbabwe, UN agencies, and private sector investors.
“This fund aims to provide financial returns and social impact, benefiting investors and those involved in renewable energy projects along the value chain. Our target is $100 million, with $20 million already committed to specific projects,” Matsekete said.
Speaking at the same event, United Nations Resident and Humanitarian Coordinator, Edward Kallon, said significant barriers such as limited financing and currency risks continue to hinder progress in renewable energy investments.
“While the government has created an enabling policy environment with deregulated electricity markets, favourable independent power producer licensing, and tax incentives, significant barriers remain,” he said.
“Inadequate local financing, currency risks, off-taker risks, and cost-reflective tariffs are some of the major challenges that limit private sector investment in renewable energy projects. We cannot afford to let these barriers continue to impede progress. A sustainable energy future requires bold action, action that promotes inclusivity, fosters innovation, and catalyses investments.”
The country’s investments in renewable energy have the potential to reduce its reliance on costly imported power and lower electricity tariffs for consumers.
The Fund aims to attract both local and international investors who are passionate about sustainability and recognise the potential of renewable energy in Zimbabwe.
