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Faced with a widening energy deficit, the Government says it will prioritise the launch of a “competitive” IPP procurement framework in 2026, in efforts to enhance investor participation in the critical energy sector, Mining Zimbabwe can report.
By Ryan Chigoche
This now urgent initiative, which was mooted some time back, comes as Zimbabwe continues to face a persistent energy deficit, with current available generation capacity at approximately 1,500 MW against a national demand of around 2,000 MW.
This 500 MW shortfall is set to worsen significantly, as demand is projected to surpass 5,177 MW by 2030, driven primarily by expansion in the energy-intensive mining, manufacturing, and agriculture sectors.
With this expected demand, if generation capacity remains stagnant, the energy deficit could widen by over 635% by 2030, underscoring the urgent need for investment and reform in the power sector.
Given the importance of energy in economic development, the Minister of Finance and Investment Promotion, Mthuli Ncube, said coming up with a competitive framework is a top priority in the coming year, as per the Budget Strategy Plan.
“In 2026, the Government will prioritise the transformation of the energy sector by launching a competitive Independent Power Producers (IPPs) procurement framework. This initiative is designed to enhance the energy market, encouraging both domestic and international investment through a more liberalised and transparent approach.”
“The new framework will be underpinned by several key measures, including facilitation by the Government to ensure that all IPP procurement processes are open and competitive, with clear and transparent guidelines for participation. This is aimed at attracting reputable investors and fostering innovation in power generation.”
“Government, in collaboration with key energy stakeholders, will strengthen the independence and capacity of regulatory agencies to ensure fair treatment of all market participants,” Ncube said.
For some time, Zimbabwe’s current Independent Power Producer (IPP) framework has struggled to attract significant private investment due to a combination of structural and regulatory challenges.
Chief among these are unbankable Power Purchase Agreements (PPAs), currency instability, and the absence of government guarantees—all of which deter both local and international financiers.
Investors face high exchange rate risk as payments are often made in local currency, while delays in licensing, bureaucratic red tape, and lack of clarity in the tendering process further weaken confidence in the system.
Additionally, poor transmission infrastructure and a lack of coordination between energy authorities continue to hamper the integration of new projects into the grid, despite the government’s stated ambition to boost renewable energy generation.
However, according to the Ministry of Finance, the regulatory and permitting processes that are going to be part of this new framework are expected to reduce delays and uncertainties for new projects, while a dedicated IPP procurement office will coordinate all related activities and stakeholder engagement.
This is a welcome development, given that the role of energy in modern economies cannot be overemphasised.
Also in support of this new framework, the modernisation of electricity infrastructure—including grid expansion, digitalisation, and the deployment of advanced storage technologies—will also be prioritised in 2026, the government said.
Going forward, the authorities will promote a diversified energy mix, prioritising investments in renewable energy sources such as solar and hydro, while maintaining flexible thermal capacity to ensure security of power supply.
In recent times, the Government has already put in place some necessary regulatory frameworks which have encouraged captive power producers to continue generating electricity for their own use, supplementing or offsetting reliance on the national grid.
The mining sector has led on this front, with almost all the major miners now generating their own power, while others have already budgeted for that.
