7 December 2017

Zimbabwe: Old Mutual to Build Solar Power Projects

Old Mutual intends to construct solar power projects with capacity to generate at least 50 megawatts, a senior official has said. The projects will entail the construction of two solar power plants in Gwanda and Chipinge, Old Mutual chief investment officer (Alternative investments) Benjamin Sithole said yesterday.

He said some solar panels will be laid on the rooftops of its properties countrywide. Old Mutual, a diversified financial services group, has the biggest property portfolio in the country.

"It is a project at a very advanced stage and we should be signing some of the contracts with technical partners before end of this year," Mr Sithole told delegates attending Zimbabwe's first green investments catalyst roundtable here in Victoria falls.

He did not disclose the amount of investment required for the projects. The two day investor roundtable was meant to discuss ways in which Zimbabwe could develop a framework to enable to issuance of financial instruments that could be used to raise capital to finance projects considered to have less impact on climate.

Making a presentation earlier at the same conference secretary in the Office of the President and Cabinet and chairperson of the high level committee on climate change Ambassador Bornface Chidyausiku said Zimbabwe should come up with policies to enable establishment of a green loan and bond framework to raise funding for projects with less negative impact on the climate to help meet its climate goals.

Old Mutual recently commissioned a 1,5 megawatt solar power plant in Chipinge, which was financed to the tune of $1,5 million. Zimbabwe's energy and hydro policy has identified solar energy as one the country could use to mitigate greenhouse emissions.

Studies have shown that Zimbabwe is currently emitting an estimated 26 000 giga grammes of carbon dioxide into the atmosphere, representing about 0,5 percent of the world emissions Power generation activities, mostly thermal plants, account for about 48 percent while agriculture contributes about 44 percent.

The country is a signatory to the Paris Climate Change Accord signed in 2015, which largely seeks to keep the threshold of global average temperature below 2 degrees Celsius. Before the 21st Paris United Nations Framework on Climate Change, Zimbabwe had submitted its Intended Nationally Determined Contribution like most parties to the convention.

The INDC was the country party's own submission of greenhouse gas emissions reduction ambition/target. The INDC was adopted under the Paris Agreement to influence climate change mitigation efforts in pursuant of temperature goal by 2030. Zimbabwe submitted a conditional 33 percent energy sector per capita greenhouse gas emission reduction target.

The submission was conditional on the means of implementation namely technology development and transfer, relevant training and financial support. Zimbabwe needs about $90 billion to meet its climate goals. Of this, $55 billion is for clean energy.

Other presenters at the Victoria Falls forum concurred that while Zimbabwe had several opportunities to attract green capital, the Government should come up with investor friendly policies and work on normalising relations with the international community and potential up takers of the bond.

At the Paris Agreement in August this year, Zimbabwe indicated it was stepping up efforts to deliver its mitigation contribution. Part of the steps includes development of frameworks for investment like the green bonds among other financial instruments. The green bonds are growing category of fixed income securities to raise funds for green projects.

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