Government bureaucracy has left one of the country’s most promising solar projects needing business rescue, reflecting the frustrations that many potential energy investors face in Zimbabwe.
The 20MW Harava solar project in Seke won approval from the Zimbabwe Investment Development Agency in February 2022. This attracted interest from the Equatoria Guinea Sovereign Wealth Fund, which in 2021 agreed to invest US$15 million in equity in the project. But delays by the Reserve Bank of Zimbabwe have stalled the investment, leaving it unable to pay contractors and funders.
Now Old Mutual Life Assurance, an investor in Harava, has applied to the High Court to have the project placed under business rescue. Old Mutual loaned Harava US$1.8 million, which Harava has failed to pay back.
Old Mutual says in its court papers: “It may simply require a few months for the slow-moving wheels of government to release the funds to enable the Equatorial Guinea Sovereign Fund to acquire equity in Harava, which will resolve all its financial difficulties.”
Harava has installed 6MW of panels, but the plant is still idle. This is because it cannot raise the US$3.4 million needed for the equipment to connect to ZESA. Harava needs US$4.75 million to scale up to 10MW and US$10.35 million to go up to its target of 20MW. Old Mutual says Harava cannot raise this money.
The plan owes equipment supplier Ever Prosperous World Wide US$10.1 million. The supplier has since obtained a writ of execution against the solar plant. Placing Harava under business rescue would protect it from such claims, Old Mutual says.
According to Old Mutual: “It needs time to complete construction and trade itself out of its debts.” Saving the project is key, says Old Mutual, given the difference it can make. ”The Project has the capacity to generate approximately 400Wh per year which is capable of powering about 40 000 households.”
Old Mutual has expanded its investment in green energy over recent years. Its other energy investments have been more successful. These include Solgas Energy, which has built a 5MW plant in Dete, and Centragrid, one of the first independent power producers to feed power into the grid. Old Mutual is also invested in Richaw Solar in Gwanda, Kupinga, and the Great Zimbabwe Hydro project.
Zimbabwe is hungry for solar investments, but concerns over tariffs and the currency, plus government policy uncertainty, has kept potential investors away.-NewZWire
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