Home » Business » Cabinet Approves IPP Licences Cancellation

Cabinet has approved the cancellation of operating licenses for Independent Power producers who have failed to make meaningful progress. This decision follows several warnings given to IPP’s by Government to start implementing their projects to take aantage of the huge projects lined up by Government in the key productive sectors of the economy.

Government said it would implement the “use it or lose it policy” on producers that fail to utilise their licences.

Industry and Commerce Minister Mike Bimha said Government will start the process of revoking licences as it was keen to ensure that the

power problem is addressed as the country steps up efforts to start the implementation of Zimbabwe Agenda for Sustainable Socio-Economic Transformation.

“Cabinet has approved a use it or lose it policy so that all IPPS that have failed to make progress give an opportunity to those with the capacity.

“The projects lined up under Zim-Asset present a huge opportunity for IPPs and it is high time that they should accelerate their projects,” said Minister Bimha.

Government has of late expressed frustration over failure by IPPs to get their proposed projects off the ground, years after they were licensed to construct power stations.

A few projects have taken off and fears are that it might take longer than expected for the IPPs to start generating electricity because of the heavy capital outlays required.

Minister Bimha, however, said his Ministry together with Ministry of Energy and Power Development agreed to reduce power tariffs for Sable Chemicals because it is critical to the economy.

Sable is still using electrolysis which is an old and costly technology which uses a lot of electricity.

When Sable was set up, there was an agreement that it would enjoy a reduced tariff but this has not been the case.

Because of that, the company’s production capacity has been affected and it has been considering migrating from electrolysis to either gas or coal bed methane.

Minister Bimha said the tariff cut will not remain forever but will just stay until the company migrates to a new technology.

“The approved cut in tariff for Sable Chemicals is not going to stay forever but we decided that we should give them, some space for them to migrate to new technology.

“However, we hope that IPP’s would also come into the mix to cover the power gap,” said Minister Bimha.

Source : The Herald

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