Rural Energy Fund

Zimbabwe, in the next four years, is expected to review the current Rural Electrification Fund Act, which will see the formation of a Rural Energy Agency.In southern Africa it is projected that the Zimbabwean government will evaluate the existing Rural Electrification Fund Act by the year 2020, which is meant to realise the expansion of the current mandate of the Rural Electrification Fund.

The acting planning and technology director at the Rural Electrification Agency (REA), Cliff Nhandara, explained to local media, the Herald, that through the establishment of the agency, a Rural Energy Fund will also be founded.

Rural Energy Fund

Nhandara said the new fund will operate a revolving fund providing grant and subsidy-funding for rural households.

It is reported that the present Rural Electrification Fund Act provides for the funding of REA programmes through levies, loans, fiscal allocations, grants and donations.

Currently, the rural electrification programmes are primarily funded through a 6% levy on all electricity consumers as well as fiscal allocations, media reported.

Nhandara stated that the organisation requires more resources given its mandate.

More funding required

He said capital expenditure for a chosen level of service providing lighting and phone charging for 96,798 households, REA requires about $37,1 million. This figure jumps to $1,7 billion when including high power appliances.

“If we provide off grid solutions to Matabeleland North and Matabeleland South we would need $37,1 million.

“However, if we provide Tier 2 only (which includes lighting, phone charging, televisions and fan) in those two provinces we require $53,6 million," Nhandara said.

These figures are beyond the financial capacity of REA as it collects only 6% levies and grants, which is why plans are said to be underway for a revolving funding scheme.

The REA official said the Renewable Energy Fund will also accelerate the review of the Rural Energy Master Plan, which will guide the pathway for rural energy access in Zimbabwe.

“On its part, the ministry of energy and power development should consider developing a rural energy policy to guide the operation of the Rural Energy Master Plan,” he said.