Zimbabwe’s drive to attract private capital into the power sector gained momentum on Tuesday after the 30-megawatt Vungu Solar Project signed a 25-year Power Purchase Agreement with the Zimbabwe Electricity Transmission and Distribution Company, clearing a key hurdle toward financial close and construction.

The long-term PPA secures an offtake arrangement allowing the project to sell electricity to the national grid at agreed tariffs — a critical requirement for project financing in a power sector long viewed by investors as high-risk due to currency volatility and tariff uncertainty.

Once operational, the project is expected to generate enough electricity to supply about 76,000 households, according to figures released at the signing ceremony, placing it among Zimbabwe’s most significant grid-scale solar developments to date. 

At 30MW, Vungu Solar would account for roughly 3% of Zimbabwe’s effective installed capacity, which remains constrained by ageing thermal plants, low water levels at Kariba, and chronic underinvestment.

The project was founded by Energywise Equipment and Impala Power, and is being developed by UK-based Private Infrastructure Development Group through its development arm, Infraco Africa. This positions Vungu Solar as one of Zimbabwe’s first internationally project-financed solar independent power producers designed to feed directly into the national grid.

The PPA follows the signing last year of a Government Project Support Agreement between Infraco Africa and the Government of Zimbabwe, part of a broader policy effort to de-risk private energy investments. The GPSA provides guarantees including cost-reflective tariffs, a designated power offtaker, and assurances on profit repatriation — measures aimed at addressing long-standing concerns that have stalled dozens of licensed IPPs over the past decade.

Speaking at the signing ceremony, UK Ambassador to Zimbabwe Pete Vowles said the agreement marked a turning point for both the project and the wider renewable energy market.

“The agreement being announced today is an important step towards finalising the Vungu Solar project, which will provide enough power for 76,000 homes,” Vowles said.

“By agreeing a pricing structure, this project is also helping to set a template for more investors to enter Zimbabwe’s renewable energy market, creating jobs and building a greener future for all.”

Energywise Equipment chief executive Culven Chipfumbu described the PPA as a critical milestone, while acknowledging that securing financing remains the immediate priority.

“The signing of the PPA is a key milestone for Vungu Solar, and we would like to acknowledge the commitment of ZETDC, ZERA, and our partners PIDG and Impala to the project,” Chipfumbu said.

“We are committed to securing financing with urgency so that construction can begin as soon as possible.”

Zimbabwe has licensed more than 100 IPPs, predominantly in solar energy, but fewer than 10% have reached construction or operation. Weak utility balance sheets, non-cost-reflective tariffs in previous years, and foreign currency risks have been major constraints.

As a result, the Vungu Solar PPA is being closely watched as a test case for whether recent policy reforms — including the use of GPSAs — can unlock stalled private generation projects.

If financial close is achieved, Vungu Solar would not only add capacity to a grid that routinely sheds hundreds of megawatts during peak demand, but also establish a pricing and risk-allocation benchmark for future renewable projects, at a time when Zimbabwe faces growing pressure to expand power generation without increasing public debt.