While many investors are leery over projects in Zimbabwe – especially after record inflation, agroprocessing firm Tongaat Hulett is optimistic and is pledging an additional R145 million toward various sectors within the southern African country.
One industry to benefit from the company’s investment will be Zimbabwe’s renewable energy sector. Tongaat Hulett announced in August 2008 that it planned to spend about R7 million on developing cogeneration projects at four of its southern African mills, generating 266 MW of power. The company said that the additions would be affected by the market, offtake agreements, regulatory frameworks, and pricing that acts as an incentive to producers.
However, the Southern African Power Pool (SAPP) is less enthusiastic with Zimbabwe as the country continues to fall short with its efforts to rehabilitate its power generation and transmission network (Zimbabwe May Hold Up SAPP’s Smart Grid Dreams). The SAPP created a power pool plan constituted by 29 new electricity generation projects and six transmission projects to decongest the grid and boost load flows from 2009 to 2015.
Tongaat Hulet CEO Peter Staude said that there was currently little incentive for renewable energy producers in South Africa, in terms of pricing, and that markets had also not yet been established in many other southern African countries.