Overview of the Zimbabwean Electricity Industry

Frost & Sullivan, December 2010, Pages: 77

Numerous developments are expected within the Zimbabwean electricity from 2012 onwards due to the electricity demand and supply situation in the country. Zimbabwe is exiting a 10 year period of economic decline and hyper-inflation and the government of Zimbabwe acknowledges that economic growth needs to be supported by the availability of electricity to sectors such as mining and manufacturing that are expected to drive economic growth. The ministries of Energy and Power Development, and Economic Planning and Investment Promotion are engaging investors who can possibly develop electricity industry projects in partnership with the state utility ZESA or in their private capacities

Research Overview
This Frost & Sullivan research service titled Overview of the Zimbabwean Electricity Industry provides electricity installed capacity and electricity demand forecasts, an analysis of the key industry participants and a comprehensive examination of the development of key projects in the industry.

Market Overview

Zimbabwean Electricity Industry to Benefit from Revival of Overall Economy

Growth in the Zimbabwean electricity industry will be driven by the resurgence of the country’s economy. Economic growth will boost electricity demand - electricity demand for 2010 exceeded available electricity capacity by an estimated 1,266 MW. Promisingly, a solid project pipeline to increase available electricity capacity exists in the country. Zimbabwe is anticipating significant economic growth from 2010 to 2015, after going through a 10-year period of economic contraction and hyperinflation. Demand for electricity is expected to increase as the economy grows and spur investment in the power sector. “The future of the electricity industry is heavily dependent on the outcome of future elections, economic growth and the adoption of policy that promotes local and international private sector investment,” cautions the analyst of this research. “There are several electricity industry projects in the pipeline that have not secured funding, and the development of these projects could improve the electricity demand and supply situation within the country.”

Availability of electricity feedstock, mining resources and an efficient labour force are positive factors that could help fuel the development of the Zimbabwean electricity industry. For instance, the country has coal reserves that will approximately last the next 200 years at a production output of 5,000 tons per annum. These coal reserves can be used as feedstock for coal coal-fired thermal power stations. “The Zambezi river, which runs along the Zimbabwe-Zambia border, has hydro potential of 5400 MW, of which only 750 MW is currently being utilised,” adds the analyst. “Furthermore, Zimbabwe has copper and ferro-chrome deposits, which can be used in pylon and cable manufacture and maintenance.”

Solid Project Pipeline, Coupled with Move toward Cost-reflective Tariffs, Bode Well for Future

Acknowledgement of the need for and the move towards cost-reflective tariffs will also support market growth. The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) currently charges an average tariff of 7.5 c/kWh which is 25 percent less than an estimated cost recovery tariff of 10 c/kWh. In order to operate viably and minimise the seeking of short-term debt to cover operating expenses, Zimbabwe Electricity Supply Authority (ZESA) holdings needs to charge cost-reflective tariffs. The Government of Zimbabwe also acknowledges that in order for IPPs to operate viably within the industry, tariff levels and power purchase agreements should be set at levels that enable the recovery of costs. “In the short term, tariffs are not expected to increase,” states the analyst. “However, in the medium to long term, as the billing and revenue collection improves, ZESA expects to charge economically viable tariffs.”

The poor state of existing electricity industry infrastructure presents a major challenge to sustained market expansion. The bulk of Zimbabwe’s electricity industry infrastructure is outdated or dilapidated due to theft, vandalism and neglect. The country’s two major sources of electricity, Hwange Thermal Power station 1and 2, and Kariba hydro-electric power station were commissioned in 1972 and 1959, respectively. They are in need of technology upgrades to maximise efficiency. “Accordingly, there is an increasingly significant market for original equipment manufacturers (OEMs) given the number of maintenance and repair projects that are in the pipeline,” remarks the analyst. “Generation projects that are likely to lead to a considerable increase in installed capacity are the Gokwe North Power Project, and expansion to Kariba and Hwange power stations.” Transmission capacity expansions for the rural electrification projects are also anticipated in the long term. Independent power producers (IPPs) are expected to participate more in the long term due to projected regulation and licensing reforms.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

- Generation
- Transmission
- Distribution

1. Executive Summary
- 1.1 Introduction
- 1.2 Research Aim and Objectives
- 1.3 Research Scope and Methodology
- 1.4 Summary of Key Findings

2. Zimbabwean Electricity Industry Overview
- 2.1 Structure of Electricity Industry
- 2.2 Industry Challenges
- 2.3 Industry Drivers and Restraints

3. Infrastructure Analysis
- 3.1 Generation Infrastructure Analysis
- 3.2 Generation Capacity Analysis and Forecasts
- 3.3 Transmission and Distribution Infrastructure Analysis
- 3.4 Electricity Demand Analysis
- 3.5 Feedstock Analysis
- 3.6 End-user Analysis

4. Analysis of Policy and Legislation Framing the Electricity Industry
- 4.1 Analysis of Current and Future Policy and Legislation
- 4.2 Implications of Policy on Independent Power Production

5. Future Development and Opportunity Analysis
- 5.1 Planned Generation Projects
- 5.2 Planned Transmission and Distribution projects
- 5.3 IPP Analysis
- 5.4 Key Industry Participants
- 5.5 Summary of Key Investment Opportunities

6. Conclusions
- 6.1 Conclusions
- 6.2 About Frost and Sullivan

List of Figures-
- Electricity Industry: Examples of Recent Investment Decisions (Zimbabwe), 2010
- Electricity Industry: Key Generation Opportunities (Zimbabwe), 2010
- Electricity Industry: Key Transmission Opportunities (Zimbabwe), 2010
- Electricity Industry: Electricity Industry Structure (Zimbabwe), 2010
- Electricity Industry: Industry Challenges Summary (Zimbabwe), 2010-2015
- Electricity Industry: Industry Drivers and Restraints Summary (Zimbabwe), 2010-2015
- Electricity Industry: Installed Capacity (Zimbabwe), 2009
- Electricity Industry: ZESA Load Shedding Indicator (Zimbabwe), 2010
- Electricity Industry: Transmission Infrastructure (Zimbabwe), 2010
- Electricity Industry: End-user Analysis (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Project Summary (Zimbabwe), 2010
- Electricity Industry: Basic IPP Project Structure and Key Agreements (Zimbabwe), 2010
- Electricity Industry: Key Generation Opportunities (Zimbabwe), 2010
- Electricity Industry: Key Transmission Opportunities (Zimbabwe), 2010
- Electricity Industry: Key Distribution and Supply Opportunities (Zimbabwe), 2010
- Electricity Industry: Key Emergency Power Generation Opportunities (Zimbabwe), 2010
- Electricity Industry: Natural Resource Database (Zimbabwe), 2010

List Of Charts:
- Electricity Industry: Forecasted Installed Capacity (Zimbabwe), 2006-2015
- Electricity Industry: Forecasted Installed Capacity (Zimbabwe), 2006-2015
- Electricity Industry: Demand Forecasts (Zimbabwe), 2008-2015
- Electricity Industry: Feedstock Analysis (Zimbabwe), 2010-2020
- Electricity Industry: End-user Profile (Zimbabwe), 2006-2015

Product Samples

A sample for this product is available. Please Login/Register to download this sample.

Customers who bought this item also bought

• Zimbabwe Power Report Q4 2012
• Overview of Tanzanian Electricity Industry
• Sub-Saharan Africa Electricity Pricing Analysis 2009
• Zimbabwe Power Report Q2 2012
• Zimbabwe Power Report Q3 2013
• Southern Africa Power Report Q3 2012
• Southern Africa Power Report Q4 2012
• Zimbabwe Power Report Q3 2012
• Production and Investment Forecasts in the South African Power Generation Industry
• Zimbabwe Power Report Q1 2013