Govt Issues Payment Guarantee For 30MW Vungu Solar Project

The government has thrown its weight behind the 30MW Vungu Solar Project, by Vungu Solar (Private) Limited, by issuing a payment guarantee.

This means that if the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) fails to honour its commitments under the power purchase agreement, the government will step in to cover the payments.

Vungu Solar signed a 25-year power purchase deal with ZETDC back in January, and the guarantee forms part of a wider plan, first announced in 2022, to support licensed independent power producers (IPPs) with a combined target of 1,000MW.

The guarantee seeks to address long-standing concerns from investors, including low tariffs and restrictions on taking profits out of the country.

Under the Government Project Support Agreement, IPPs are offered cost-reflective tariffs, a guaranteed buyer for their electricity, and the ability to repatriate profits. General Notice 338 of 2026 reads in part:

“IT is hereby notified in terms of section 300(3) of the Constitution of Zimbabwe, as read with section 18(2) of the Public Debt Management Act [Chapter 22:21], that the Minister of Finance, Economic Development and Investment Promotion has issued a Government Guarantee for the payment obligations of the Zimbabwe Electricity Transmission and Distribution Company in respect of the purchase price payable under and in accordance with the Project Development Support Agreement entered into with Vungu Solar (Private) Limited registered under 15803/2018.”

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