Zimbabwe opens electricity distribution market to private operators for the first time

Zimbabwe’s government has committed to issuing private distribution and retail licences for electricity by the first quarter of 2026, ending the Zimbabwe Electricity Transmission and Distribution Company’s (ZETDC) long-standing monopoly over the sector and opening the market to independent operators for the first time.

The commitment is contained in Zimbabwe’s National Energy Compact, signed under Mission 300 — a World Bank and African Development Bank-backed initiative targeting universal energy access across 300 million Africans — and carries a declaration from President Emmerson Mnangagwa. Regulations governing third-party access to the national grid are also due by the same deadline.

The compact sets a target of 520,000 new household connections annually between now and 2030, comprising 320,000 on-grid and 200,000 off-grid. That is a steep climb from the current rate of 40,000 to 60,000 connections a year — a pace the document acknowledges is insufficient even to keep up with household formation, let alone close the access gap.

Zimbabwe adds roughly 118,000 households each year. At the present connection rate, the proportion of the country with electricity falls rather than rises. The compact records 1.76 million households with an electricity service at the end of 2024 and 2.55 million without one, against a projected 4.86 million households by 2030.

A financing gap measured in billions

The scale of the funding shortfall is explicit. Electrification currently draws between US$45 million and US$50 million annually through the Rural Electrification Fund and ZETDC. Reaching universal access by 2030 requires US$3.397 billion in total — an average of US$566 million a year. Of the US$9.13 billion the compact seeks across the entire energy sector, US$4.42 billion is expected from private investors.

High connection fees compound the problem. Households in areas the grid already reaches often remain unconnected because they must bear the cost of running infrastructure from the network to their own homes.

Private solar home system suppliers are already active in the market, connecting between 20,000 and 30,000 households annually. The Presidential Rural Solarization Scheme targets 200,000 standalone systems per year, aiming to place 1kW installations in more than one million rural households by 2030.

Infrastructure and loss reduction targets

Beyond licensing, the compact sets physical infrastructure targets: 1,607 kilometres of new transmission and distribution line, and a reduction in technical losses — currently running at between 18% and 20% — to 14% by 2030.

The liberalisation move reflects a broader pattern across Africa, where governments facing chronic underinvestment in state utilities are turning to private capital and independent operators to accelerate electrification. Countries including Nigeria, Ghana, and Kenya have pursued varying degrees of distribution privatisation or private participation in recent years, with mixed but instructive results.

Zimbabwe and Zambia are scheduled to meet in Livingstone in November for the Zimbabwe-Zambia Energy Projects Summit — a gathering with regional significance given both countries draw hydroelectric power from the Zambezi River. The question of who holds licences to sell electricity once it is generated is likely to feature prominently in those discussions.

No specific private operators have yet been named as applicants or licence holders under the new framework.