Zimbabwe needs US$10 billion to fix power crisis

Published: 4 hours ago

Zimbabwe will require up to US$10 billion in energy sector investment over the next decade to meet rising electricity demand and address chronic power shortages, according to a new report by Veritas, a local legal and policy think-tank. The report warns that while wealthier citizens and businesses are managing through expensive off-grid solutions, the country's poor are being left behind in the dark.

The findings come at a time when the economy continues to be battered by erratic electricity supply, with generation capacity hovering around 1 400 megawatts (MW) against a national demand of over 4 000 MW. Veritas described the situation as dire, pointing out that the shortfall has pushed many households and businesses to rely on private solar systems, diesel generators, and other costly alternatives - luxuries that remain far beyond the reach of most Zimbabweans.

The crisis is unfolding against a backdrop of mounting debt. Zimbabwe currently owes US$21.5 billion to external creditors - nearly half of its US$44 billion gross domestic product. Finance Minister Mthuli Ncube recently acknowledged that while the government would continue making token payments to creditors including the World Bank and the Paris Club, the pace was not fast enough to unlock access to new international funding for infrastructure, including energy projects.

Veritas also noted a worrying contradiction: despite struggling to meet domestic demand, state utility ZESA Holdings continues exporting electricity to neighbouring countries. Parliament has said these exports are necessary to settle debts related to recent infrastructure upgrades, particularly those funded by China. The bulk of Zimbabwe's domestic power currently comes from the Kariba South hydroelectric plant and the Hwange thermal power station. Kariba, with a capacity of 1 050 MW, has been hampered by recurrent droughts that affect water levels in the Zambezi River. Although water levels improved this year, the plant's output remains vulnerable to climatic fluctuations.

Hwange, which was recently expanded with a US$1.5 billion Chinese loan, contributes an estimated 600 MW through two new units. However, this is still far short of national needs. The country's other aging thermal power stations - Munyati, Bulawayo, and Harare - remain largely idle and require complete overhauls before they can contribute meaningfully to the grid. Meanwhile, the US$200 million Dema diesel power plant, commissioned in 2016, has been mothballed amid ongoing concerns about its sustainability and cost-effectiveness.

The Veritas report expresses concern over the slow progress in solar energy development despite Zimbabwe's abundant sunshine. Notably, a high-profile US$100 million solar project in Gwanda, awarded to Intratek Zimbabwe and its controversial owner Wicknell Chivayo, has stalled amid legal disputes, even after the state paid US$5 million in advance. In contrast, private companies such as Centragrid, Zimplats, and Econet's Distributed Power Africa have rolled out solar initiatives - but largely for internal use rather than national relief.

The country continues to import electricity from Mozambique's HCB, South Africa's Eskom, and the Democratic Republic of Congo's SNEL. However, growing arrears and limited access to foreign currency have constrained imports, further complicating the energy crisis.

In its policy recommendations, Veritas called for a fundamental overhaul of Zimbabwe's energy planning. It urged the government to reassess the national energy mix, ensure broader access to renewable energy, and provide incentives for domestic and commercial users to adopt solar. The report also emphasized the importance of completing large-scale infrastructure projects such as the long-delayed Batoka Gorge hydroelectric plant, and advocated the use of domestic pension funds and other local resources to help finance the sector.

Multilateral lenders increasingly favour clean energy initiatives, and Veritas stressed that Zimbabwe's energy strategy must be aligned with global climate finance frameworks to attract funding. It warned that without bold and inclusive reforms, the power crisis would continue to choke economic growth and deepen social inequality.

Finance Minister Ncube, in his 2025 mid-term budget review, noted that the growing use of captive power by companies and households - estimated to contribute at least 86 MW - has helped ease some pressure on the national grid. He also reaffirmed government support for rural electrification programmes led by the Rural Electrification Agency, aimed at extending power access to marginalised communities.

Still, Veritas said these efforts remain inadequate when weighed against the magnitude of the crisis. It argued that failing to provide affordable and reliable electricity to all Zimbabweans risks worsening poverty, inflation, and unemployment - while undermining the broader goals of development and national dignity.
- The Standard

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