Zimbabwe’s Vungu Solar Project: A 25-Year Power Purchase Agreement
In a significant move to bolster its energy security and advance its renewable energy ambitions, Zimbabwe has finalized a 25-year Power Purchase Agreement (PPA) for the Vungu Solar Project. The state-owned utility, Zimbabwe Electricity Supply Authority (ZESA), has committed to purchasing power from the 20 MW solar plant, marking a critical milestone for private-sector investment in the nation’s beleaguered power sector.
This landmark agreement provides the necessary offtake security for the project, paving the way for construction to commence and bringing much-needed clean energy to the national grid.
Project Deep Dive: The Vungu Solar Project Initiative
Located in the Vungu Rural District of Midlands Province, the Vungu Solar Project is being developed by Vungu Solar (Private) Limited. This special purpose vehicle is backed by Power Ventures Limited (PVL), the independent power producer (IPP) arm of Innscor Africa Limited, one of Zimbabwe’s largest listed conglomerates.
The project is planned with a total capacity of 20 MW and is expected to require an investment of approximately US$20-25 million. Development will occur in phases, with the first 10 MW scheduled to be operational and feeding power into the grid by the fourth quarter of 2026.
A Landmark Agreement: The 25-Year PPA for the Vungu Solar Project
The signing of the 25-year PPA in early February 2026 is the cornerstone of the project’s viability. The agreement establishes a long-term, stable revenue stream, which is crucial for securing financing and mitigating investment risk.
Key terms of the agreement include:
- Tariff: A competitive feed-in tariff set at approximately US$0.095 (9.5 US cents) per kilowatt-hour (kWh).
- Currency: Crucially, ZESA has agreed to make payments in US dollars. This provision directly addresses currency volatility risks, a major concern for investors in the region.
- Grid Integration: The plant will connect to the existing Vungu 33kV substation, facilitating the efficient distribution of the generated electricity.
This long-term, dollar-denominated agreement signals growing confidence and provides a bankable framework for future IPP projects in the country.
Broader Impact: Powering Zimbabwe’s Future with the Vungu Solar Project
The Vungu Solar Project arrives at a critical time for Zimbabwe, which has long grappled with chronic power shortages and rolling blackouts lasting up to 18 hours a day in some areas. The country’s reliance on aging thermal and hydro power stations has left the grid vulnerable to technical failures and climate-related challenges like low water levels.
Upon completion, the Vungu plant is projected to generate approximately 40 GWh of clean energy annually—enough to power around 20,000 households or support small industrial operations.
Beyond immediate relief for the grid, this project aligns with Zimbabwe’s strategic objectives. It is a significant contributor to the National Renewable Energy Policy (2023), which targets sourcing 20% of the country’s energy from renewables by 2030. The project also promises tangible economic benefits, with an estimated 200 jobs to be created during the construction phase and around 20 permanent roles for ongoing operations and maintenance. Furthermore, it supports local industry through PVL’s plans for panel assembly.
With regulatory approvals from the Zimbabwe Energy Regulatory Authority (ZERA) already secured, the Vungu Solar Project stands as a powerful example of private-sector leadership driving Africa’s renewable energy transition. It underscores a growing momentum that could light the way for a more stable and sustainable energy future for Zimbabwe.
