Minister Moyo said this at the 9th Powering Africa Summit
2024, which concluded in Washington DC, United States, yesterday.
The summit focused on energy project development and
infrastructure and the enabling environment, running under the theme: “Capital
flows underpinning the energy transition.”
Sponsors, African utilities, regulators, and delegates
among others were selected from Egypt, Ethiopia, Sudan, Zimbabwe, Malawi,
Senegal, Eswatini, Djibouti and São Tomé and Príncipe.
The conference featured discussions on the effects of
lowering loan costs, looking for alternatives to sovereign guarantees, and
unlocking the climate financing pledged to Africa’s energy industry.
Minister Moyo made a presentation on the potential impact
of reducing the cost of debt and different approaches to sovereign guarantees.
“A low cost of debt enhances the return on investment
attracting foreign investors into the sector. Financial stability reduces
pressure on utilities because when the cost of debt is very high there is a lot
of pressure on the utilities and a lot of turbulence then occurs.
“With more independent power producers able to supply
affordable power, national utilities can reduce their financial deficit.
Improved utility performance results in competition from independent power
producers and can lead to efficiency gains in the electricity sector,” he said.
The Minister said Zimbabwe was working on creating a more
favourable environment for business.
“In the Zimbabwe case, the Government has finalised risk
guarantee mechanisms through what we call a government implementation agreement
and just last week we were issuing these agreements to prospective developers
in the private sector.
“These energy sector reforms create an enabling environment
that allows increased participation of the private sector in developing
electrified infrastructure by improving efficiencies, allowing a recovery of
efficient costs, including connection costs and increasing accountability
reforms that would include tariff regulatory accounting frameworks, tariff
review methodologies, energy planning, electricity planning structure and all
that which goes with it.
“A conducive regulatory policy framework would promote
independence of energy regulation. For example, in Zimbabwe we have what we
call the Zimbabwe Energy Regulatory Authority which regulates the sector —
fostering accountability, fairness, transparency, viability and affordability
among suppliers and consumers.”
The delegation’s participation underscores the Second
Republic’s dedication to finding sustainable solutions to its power woes.
It also focused on the critical financial aspects needed to
develop Africa’s energy sector more effectively, with conversations rooted in
reducing the cost of the debt and innovative solutions to the sovereign
guarantee impasse.
African Development Bank vice president for power, energy,
climate change and green growth, Dr Kevin Kariuki, said: “To address the energy
poverty on the continent, the international community should rely more on the
empirical evidence of risk and not perceived risk.
“The default risk of Africa is less than anywhere else in
the world, so we should just use realistic risk not perceived risks. Herald
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