Opinion

2020 National Budget: Keeping the Lights On

OPINION

By Pearl Matibe

Zimbabweans who have had to do with 18 hours of load-shedding have come to believe that there is no way out as the country exhibited a lack of capacity to produce enough electricity to meet the huge demand. Moreover, they have even changed their way of life to suit the time when the government turns the lights on.

Currently, the government is working with the Chinese in a bid to increase generation capacity while at the same time dealing with South Africa and Mozambique to supplement the current but constantly interrupted production.

However, the solution to the country’s power challenges can come from the current re-engagement efforts underway with many countries especially the United States of America and the European Union among many others.

How can they go about it?

On Wednesday 6 November 2019, Power Africa, an initiative coordinated by the United States Agency for International Development (USAID) in Washington, D.C. explained how it is helping to get electricity to other parts of Africa including Zambia.

According to Power Africa coordinator Andrew M. Herscowitz, the initiative’s foreign policy approach is private sector-driven; USAID allows businesses to request help to drive their power-related deals in the energy sector development in Africa—private sectors’ significant role.

Herscowitz explained that public and private sector energy partners have made commitments to USAID of US$54 billion, while power projects worth over US$20 billion making up, “124 power generation projects have reached financial close. That will comprise over 10,000 megawatts of new power generation.

“The more important number, though, is that 56 of those power projects have actually been commissioned, which has already added over 3,000 megawatts of new power generation.”

Of the approximately 550 million people who don’t have access to electricity in Sub-Saharan Africa, USAID has managed to get electricity to 70 million people.

In 2020 and beyond, based on a plethora of evidence of a declining economy, Zimbabwe needs an increased energy infrastructure budget allocation and it is recommended that policymakers pass laws to allow the increase of an intensified commitment to access to power that leaves no one behind and protects the most vulnerable.

During the 2019 National Budget Presentation, Finance and Economic Development Minister Mthuli Ncube told Parliament that it contained “specific interventions” that were informed by stakeholder input which included the “promotion of productivity” “investment promotion” and “fighting corruption.”

His budget had targeted the “extension of the electricity grid to unserved rural communities, where only 20% of households are electrified” under the Rural Electrification Program.

Although Zimbabwe has a long history with of shortage of electricity, yet, Zimbabweans continue to hope, and the Minister too has hopes though his 2019 budget themed “Austerity for Prosperity” and the Supplementary Budget themed “Building a Strong Foundation for Future Prosperity” failed to bring about sufficient infrastructural development in the energy sector.

 

Today, about 65% of Zimbabwe’s rural schools and clinics are electrified, according to the country’s budget reports.

 

With this context and also coupled with facts that Zimbabwe has suffered from severe weather conditions that have resulted in droughts and tropical cyclones such as the devastating Idai,

Washington, D.C.-based foreign policy expert, Pearl Matibe asked Andrew Herscowitz on how Power Africa was approaching such countries as Zimbabwe and others that have massive power challenges.

Transcript

 Pearl Matibe: I see that you are doing a lot of work with Power Africa which is great, but however, there are still large swaths of Africa that are completely being left behind. My question to you, specifically going to Southern Africa: There are people in Zimbabwe right now who go for 18 hours with no electricity, no power whatsoever.  Do you have any recommendations or any discussions that you are currently trying to put into place in your policy that might go towards not leaving people behind?  Maybe in a humanitarian manner or any things you might be examining in terms of hydro or solar?  I see the work you’re doing in Zambia, the Victoria Falls area.

Andrew Herscowitz: So absolutely we’re working on the people who’ve been left behind. That’s the whole idea behind the Beyond-the-Grid initiative. But it’s not – look, Beyond the Grid is just off-grid electricity, not even mentioning the vast majority of the electrical connections that we’ve achieved have been working with private companies that are going into areas and providing people – usually through some sort of leasing or lease-to-own arrangement – a small solar panel that can help them charge their mobile phone, light their house so that children can study at night, power a television so people are connected.

We helped run a competition to come up with more efficient refrigerators so that people could refrigerate their food in the areas or even have businesses to sell cold drinks. So we’re always looking at ways to benefit people who have been left behind.

You mentioned a humanitarian context. We launched about two years ago with the MasterCard Foundation something called the Smart Communities Coalition. That coalition is geared towards benefiting people who are living in refugee settlements and benefiting internally displaced people. We’re looking at models where some of these off-grid companies, the micro-Grid companies, and the solar home system companies might be able to bring services within these refugee settlements.

The U.S. African Development Foundation, which is one of the 12 U.S. Government agencies that is part of Power Africa, has been giving grants to local companies to provide these types of services.

So, while we focus on these large-scale big power generation projects, a significant portion of our time, effort, and resources are spent on trying to bring electricity to the last mile customer. When I look at our map in our annual report of places where we’ve helped projects reach financial close, I feel frustrated that there are countries that don’t have a dot on them. Frequently, that’s because of the country’s own issues.

Sometimes a political issue or issues of corruption have made the investment very difficult, and also sometimes it’s because a private sector doesn’t have the interest. We’re always looking for ways to drive more and more investment into new countries.

So, one of my biggest goals over the next year is to fill up that map quite a bit more so that we see power projects moving across the finish line in a transparent manner, in a sustainable manner in those other countries. Because what we found is our model is helping a country get its first power project or few power projects across the finish line through a transparent, sustainable, competitive process, building the capacity of the people in the country to manage it, and then we move on and then focus in other places as well.

 

Going into the 2020 National Budget

Minister Ncube reported that “During 2019, an amount of US$350 million will be disbursed under the China Exim Bank loan towards the Hwange 7 & 8 Expansion Project loan, to be invested towards ongoing civil works and manufacture of electro-mechanical equipment for the project among others.”

What the final 2020 National Budget allocation will be, its implications and private sector involvement will begin to emerge by mid-November as the finance minister prepares to deliver it to Parliament.

 In the U.S., Herscowitz confirmed that, “While governments and development organizations do spend quite a bit of funding to solve this problem, we don’t have the money by ourselves or let alone with the governments themselves to meet the needs for the continent, which is why it’s critical that the private sector plays a key role in the development.”

In frontline-state Zambia, Power Africa’s Annual Report confirms, “The Republic of Zambia is the first country in sub-Saharan Africa to participate in the World Bank/ International Finance Corporation (IFC) Scaling Solar program, an initiative to unlock private-sector investment for solar power in emerging markets. USAID provided US$2 million to IFC to support Scaling Solar Zambia, and the Overseas Private Investment Corporation (OPIC) provided a US$13 million loan to the Bangweulu Project, developed in the consortium by First Solar and Neoen. USAID also helped the Zambia Electricity Supply Corporation modernize its systems to bring renewables onto the national grid, and supported a competitive procurement process that resulted in one of the most-affordable solar tariffs in Africa, at just $0.06/kWh and $0.078/kWh. The Bangweulu and Ngonye Projects are generating more than 88 MW of new renewable electricity, which means more Lights On in Zambia.”

There’s a long history to how policymakers prepare for Zimbabwe’s national budget allocations. One recommendation for 2020 is to create greatly enhanced strategic reforms that include amendments to rural electrification laws and infrastructure development.

Power Africa was launched in 2013 with the goal of doubling access to electricity in Sub-Saharan Africa. In 2014, we made the more specific goal of trying to add 30,000 megawatts of new power generation and 60 million new electrical connections by 2030.

The writer Pearl Matibe is Founding Director of Advocates for Progress, has geographic expertise on U.S. foreign policy, think tank impact, strategy and public policy issues. You may follow her on Twitter: @PearlMatibe 

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Daniel Chigundu

Daniel Chigundu is a male journalist in Zimbabwe and has been practising since September 2009. He used to the editor for The Business Connect (newspaper) in Harare, has his own news website Tourism Focus which is biased towards the tourism sector. Daniel is also working with Magamba Network on their project called Open Parliament where they do live coverage of Parliamentary activities on Twitter and Facebook. He is currently the secretary-general of the Zimbabwe Parliamentary Journalists Forum, is a member of Zimbabwe Small Broadcasters Association and a board member of Digital Communication Network. He holds a Diploma in Communication and Journalism from the Christian College of Southern Africa (CCOSA), a certificate in Youth leadership training from the Friedrich Ebert Stiftung (FES), a certificate in Citizen Journalism from Magamba Network and is currently a first-year student at Zimbabwe Open University studying for a Bachelor of Arts Honours in Ethics and Organisational Leadership.

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