Commissioned by: African Climate Foundation (ACF)
Authors: Wei Shen, Senior Researcher (IIGF) & Zhengyun Zhou, Assistant Research fellow (IIGF)
The policy brief series aims to explore cases in Zimbabwe, Egypt, Ethiopia, and other African countries to understand the role of Chinese financiers and corporations in shaping renewable energy activities and their impact on energy transition pathways, addressing the heterogeneity among African countries and capturing symbiotic links with governance, market development, and value chain integration.
The International Institute for Green Finance (IIGF) of the Central University of Finance and Economics (CUFE), worked on the policy brief commissioned by the African Climate Foundation (ACF) and conducted independently by IIGF’s senior researcher Wei Shen and Zhengyun Zhou, an assistant research fellow at IIGF. IIGF is committed to conducting research within a range of areas of green finance such as credit, bonds, insurance, carbon trading, information disclosure, as well as risk assessment. The IIGF works with numerous stakeholders in green finance both within and outside China.
Here are some key points from the report:
• Zimbabwe is facing a chronic power shortage crisis, with frequent power outages lasting up to 17 hours a day in major cities, due to a lack of additional power generation capacity and aging power plants. The country is highly dependent on petroleum and electricity imports, as it lacks hydrocarbon resources and has an inefficient electricity infrastructure. Moreover, most of the population in rural areas lacks access to electricity.
• Zimbabwe has a total installed power generation capacity of 2.3 GW largely owned by Zimbabwe Power Company (ZPC), with over 50% of electricity generated from hydropower. The country has significant renewable energy potential, including solar and mini-hydropower, but limited wind energy resources.
• Zimbabwe has set ambitious targets to increase power generation from cleaner energy sources and reduce greenhouse gas emissions in line with international commitments and its long-term development goals. The Ministry of Energy and Power Development (MoEPD) is responsible for formulating and implementing energy policies and regulatory frameworks, including the National Energy Policy (NEP) and National Renewable Energy Policy (NREP), to promote renewable energy deployment and socio-economic development in local communities.
• Renewable energy projects in Zimbabwe are primarily planned or implemented through the Independent Power Producer (IPP) model, with 30 licensed IPPs projects in the energy sector with a total capacity of 194MW, mainly comprising of solar PV, bagasse, and mini-hydro facilities.
As for China’s engagement:
• Chinese State-Owned Enterprises (SOEs) have been actively involved in Zimbabwe’s solar energy market, with several signed agreements totaling at least 350MW of solar energy capacities, although challenges remain in terms of financing and technical considerations such as the impacts of intermittent power on the country’s transmission system. Therefore, it is suggested that the Zimbabwe government should prioritize a select few projects with the most promising prospects and implement a close monitoring system for the RE IPPs to avoid the dispersion of limited resources on less likely to be commissioned projects.
• Zimbabwe’s mining sector, particularly in lithium production, has been a significant driver of the country’s economy, with ambitious goals of achieving $12 billion in revenue from mining activities in 2023. Chinese companies, primarily private investors, have played a significant role in Zimbabwe’s lithium mining sector, with strategic partnerships with Chinese EV or battery manufacturers, indicating a strong focus on capital markets rather than Chinese state strategy.
Therefore, the analysis highlights the contrast between a struggling power generation sector and a booming extractive sector, particularly lithium mining, in Zimbabwe. Challenges such as energy poverty, debt burdens, and environmental and social impacts need to be addressed through coordinated efforts among Chinese agencies to achieve a successful energy transition and sustainable development in Zimbabwe.
To learn more about China and Africa’s Energy Transition: