Zimbabwe Energy Regulatory Authority Unveils National Energy Compact

Zimbabwe has launched its ambitious National Energy Compact, a strategic blueprint aimed at achieving universal access to reliable, affordable, sustainable, and clean energy for all Zimbabweans by 2030. This initiative, spearheaded by the Zimbabwe Energy Regulatory Authority (ZERA) and the Ministry of Energy and Power Development, outlines significant reforms, including the partial liberalisation of electricity retail and distribution, reduced licensing fees for renewable energy projects, and duty exemptions for related equipment. The Compact seeks to mobilise over USD9 billion in investments, with a substantial portion expected from the private sector, and is underpinned by a robust legal and policy framework, including the Energy Regulatory Authority Act [Chapter 13:23] and the Electricity Act [Chapter 13:19]. Legal practitioners must understand these evolving regulations and investment incentives to advise clients effectively on opportunities and compliance within Zimbabwe's transforming energy landscape.

Zimbabwe's energy sector is undergoing a profound transformation, marked by the launch of the National Energy Compact in 2025. This comprehensive framework represents a bold commitment by the Government of Zimbabwe to address persistent energy challenges and propel the nation towards an upper-middle-income economy by 2030, as articulated in Vision 2030 and the National Development Strategies (NDS1 and NDS2). The Compact is not merely a policy statement but a strategic roadmap designed to attract significant investment, enhance energy security, and foster sustainable development through increased access to clean and affordable energy services.

At its core, the National Energy Compact aims to achieve universal electricity access, significantly increase the share of non-hydro renewable energy in the power mix, and expand access to clean cooking solutions by 2030. This ambitious agenda necessitates substantial regulatory and legislative reforms, creating both opportunities and complexities for legal practitioners. This article delves into the legal implications of the Zimbabwe Energy Compact, examining the existing statutory framework, recent regulatory shifts, and the practical considerations for attorneys advising clients on investments and operations within Zimbabwe's rapidly evolving energy sector.

The regulatory landscape of Zimbabwe's energy sector is primarily governed by the Energy Regulatory Authority Act [Chapter 13:23] (Act No. 3 of 2011), which established the Zimbabwe Energy Regulatory Authority (ZERA) as the overarching regulator for the entire energy sector, encompassing electricity, petroleum, and renewable energy. ZERA's mandate includes licensing, promoting competition, ensuring adequate supply, and fostering the development of renewable energy. Complementing this is the Electricity Act [Chapter 13:19] (Act No. 4 of 2002), which specifically details the licensing and regulation of electricity generation, transmission, distribution, and supply.

Prior to the Compact, Zimbabwe had already laid foundational policy documents, including the National Energy Policy (2012) and the National Renewable Energy Policy (2019). These policies recognised the critical role of renewable energy in diversifying the energy mix, reducing reliance on imports, and mitigating climate change. The National Renewable Energy Policy, for instance, set targets for renewable energy development and encouraged private sector participation through various incentives. Furthermore, the National Energy Efficiency Policy, adopted in 2024, aims to promote sustainable development through energy efficiency programmes. These existing frameworks provide the bedrock upon which the more expansive and aggressive targets of the National Energy Compact are built.

The Zimbabwe National Energy Compact, formally launched in 2025, represents a significant acceleration of the country's energy transition goals, aiming to mobilise over USD9 billion in investments by 2030, with approximately USD4.5 billion expected from the private sector. A pivotal aspect of the Compact is the deregulation of the energy sector, specifically the partial liberalisation of electricity retail and distribution, allowing licensed private entities to build infrastructure, install meters, and sell power within designated areas. This marks a departure from the traditional monopoly structure and is intended to attract private capital, improve supply reliability, and expand grid access, particularly in underserved regions.

To facilitate this private sector involvement, ZERA has been actively implementing reforms, including significantly reduced licensing fees for renewable energy projects and duty exemptions for renewable energy equipment. Furthermore, the government, through ZERA, is finalising legislation to exempt projects producing up to five megawatts from licensing fees, further lowering entry barriers for smaller-scale independent power producers (IPPs). These measures, coupled with the Zimbabwe Investment and Development Agency (ZIDA) acting as a one-stop-shop for investors, signal a concerted effort to create a more investor-friendly environment. Foreign investors face no specific restrictions in the renewable energy sector, and incentives like tax breaks for new investments are available.

In March 2026, the government approved eight new governance frameworks, including specific statutory instruments and regulations designed to augment the National Energy Compact. These include the Energy Regulatory (Designation of Energy Source) Notice, 2026; the Energy (Solar Products and Installation) Regulations, 2026; and the Electricity (Minimum Energy Performance Standard for Appliances and Labelling) Regulations, 2026. These new instruments are critical for enhancing regulatory oversight, providing clear operational guidelines, and ensuring consumer protection, while also supporting the transition to renewable energy and sustainable baseload capacity. The introduction of a policy compelling large energy consumers to develop their own captive power facilities within two years further underscores the drive for self-sufficiency and diversified generation.

While the policy direction is clear, legal practitioners must navigate the interplay between existing legislation, such as the Electricity Act [Chapter 13:19] and the Energy Regulatory Authority Act [Chapter 13:23], and these new and forthcoming regulations. Issues such as power purchase agreements (PPAs) for IPPs, grid connection standards, tariff structures, and dispute resolution mechanisms will require careful consideration. The unbundling of ZESA Holdings and the roles of its successor companies (Zimbabwe Power Company and Zimbabwe Electricity Transmission and Distribution Company) also present complexities in contracting and operational agreements. The emphasis on net-metering regulations, approved in 2018, also provides a framework for distributed generation, which will be crucial for achieving universal access targets.

The Zimbabwe National Energy Compact represents a pivotal moment for the country's energy sector, signalling a decisive shift towards a more liberalised, sustainable, and investment-driven landscape. For practising attorneys, this presents a dynamic environment ripe with opportunities in project finance, regulatory compliance, mergers and acquisitions, and dispute resolution within the energy space. The commitment to attracting private sector investment, coupled with specific incentives and the ongoing development of supportive statutory instruments, necessitates a proactive approach to understanding these changes.

Practitioners should closely monitor the finalisation and implementation of the new statutory instruments and regulations approved in March 2026, particularly those pertaining to solar products, energy efficiency standards, and electricity licensing for own consumption undertakings. Advising clients on the nuances of licensing requirements under the Electricity Act [Chapter 13:19] and the Energy Regulatory Authority Act [Chapter 13:23], navigating the ZIDA investment facilitation process, and structuring robust power purchase agreements will be paramount. The partial liberalisation of electricity retail and distribution also opens new avenues for market entry and competition, requiring careful legal guidance to ensure compliance and mitigate risks in this evolving market. Staying abreast of ZERA's pronouncements and policy updates will be crucial for effectively guiding clients through Zimbabwe's ambitious energy transformation.