CALLS FOR FARMERS TO VENTURE INTO SOLAR BUSINESS MISGUIDED

Background

The Minister of Energy and Power Development in Zimbabwe made some startling remarks when he was accompanying the country’s Vice President on some of the countrywide tours of Wheat Production Programme. “He is reported to have urged farmers to diversify into power generation and set aside at least 200 hectares of their land for that.” As has become an annual custom of supporting wheat production, this year the government is targeting close to 80 000 hectarages of winter wheat production. Utilities are expected to support the initiative, mainly led by ZETDC, the power provider, and ZINWA providing water resources. ZETDC has already assured farmers of uninterrupted power for three days per week. Advertisements have been flighted in various media and social media, all meant to reassure wheat farmers of availability of power.

Statistics on the sector.

In Zimbabwe, agriculture consumes close to 10% of electricity which is lower that mining, industry and commerce, and domestic users as stand-alone sectors. At the regional level, South Africa agriculture consumes 2% of electricity generated, Zambia agriculture consumes close to 2% of electricity, Malawi consumes 1%, Kenya and Botswana consume 5% apiece and Mozambique less than 1%. Further interrogation of this discrepancy needs attention in another forum. Whilst this is not the gist of this article, it is worth mentioning that a significant number of farmers had challenges in extinguishing their legacy debts with the utility since the genesis of land reforms. Agriculture contribution to the ZETDC legacy debt has pendulumed around 12%, which by commercial indicators is considered high and significant. It is higher than that of mining at 9%, the industry at 9%, and commercials at 8%. At some point efforts to install pre-paid meters to collect outstanding payments were met with resistance by most commercial farmers.

On the contrary, the cost of unserved energy in agriculture is very high compared to other economic sectors. The cost of unserved energy is one of the key indicators of economic loss on a unit of energy not supplied due to unplanned outages.

Below are the comparisons.

Sector COUE ($kWh)

Agriculture 6.70

Mining 1.04

Manufacturing 1.42

Service 4.84

The net result is the loss in production, loss of crops, damage to equipment and raw materials, and loss of productive resources which is high and more pronounced in agriculture compared to other economic pillars.

Opinion on the sentiments

The issue of uninterrupted power for agriculture has been a topical and emotive issue at many fora and has taken various dimensions. Collectively, farmers want uninterrupted, reliable, sustainable, and competitively priced electricity. They do not have the luxury of venturing into some other technical and very expensive forays like power generation either full time or as a side hustle. Farming in any form and mode is cumbersome, complex, high time intensity, and expensive. Sometime in October 2019, I had an opportunity to facilitate and moderate a high-level energy conference and one of the leading farmer's organizations had a slot to share its opinions. I have fused their opinions with my thoughts on the whole discussion on farmers venturing into the energy sector.

a. Farmers have great opportunities for off-grid captive power. There are countless opportunities to make agricultural power self-sufficient. One model is tapping into various government initiatives like command agriculture to include the powering of agriculture infrastructure. It is not only power that is key in unlocking value for farmers, but also the use of efficient and right equipment and infrastructure. This includes solar-powered machinery and equipment. For example, irrigation equipment could come as one unit fitted with solar power. Considering the option of sustainable power for intensive energy uses like tobacco curing, vegetables drying and horticulture cooling is key to achieving power self-sufficiency. Again off-grid power is the way to go in such setup.

b. Arguably, Zimbabwe has the highest density of dams on farmland in sub-Saharan Africa outside of South Africa. Regrettably, these have not been in extensive use since the country’s land reformation processes. There is a big captive market for off-grid power. Hydropower is competitive to set up and has a significant donor and grant funders in Zimbabwe. Rather than focussing only on solar only, we should complement that with other equally good sources of power like captive hydro and biogas.

c. The Ministry of Energy and Power Development alongside other key stakeholders must have a keen and vested interest in all discussions and debates on securitizing land in Zimbabwe. This is the first step in unlocking value for agricultural land.

d. Review the threshold of 999 kWh cap on the ZERA licensing of projects. Suggesting a cap of 5MW requiring no restrictive and cumbersome licensing regime would be a starting point. Even the newly launched policy speaks to this overhaul.

e. Review the ZETDC model of the DONATION of infrastructure. It is anti-business and bizarre, more-so in a country in search of local and foreign investors in infrastructure development.

f. The Ministry of Energy and Ministry of Finance as the key shareholders in ZETDC should channel efforts in making ZETDC a commercially viable entity. The starting point is having corporate governance structures in place. ZETDC, arguably one of the biggest companies in Zimbabwe and region by turn over, has not had a board since 2013. The illusion cover of saying the organization is restructuring is not adequate for corporate governance deficiency. Even if it is being wound up, it still requires a board to oversee that process. Not only is the board not in place at ZETDC, but also no substantive key management in place.

Conclusion

Whilst it is a noble initiative for farmers to generate their own power, it should be an exception rather than the norm. Energy authorities should make the business of generating power investors attractive so that farmers can focus on producing food for the country and the world without worrying about the availability of sustainable and modern electricity at a commercially viable price.

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