Industry Trend Analysis - Power Forecasts Remain In Place Despite Coup - DEC 2017

BMI View: We are maintaining our bearish outlook for the Zimbabwean power sector from prior to the coup , as apart from the nearly-completed Kariba South expansion project, the majority of projects were already stalled due to a lack of funding. While the coup will result in political uncertainty and the potential threat of violence, the possibility of economic reforms after the political transition presents upside risks to investment opportunities in Zimbabwean power projects.

We are maintaining our downbeat outlook for the Zimbabwean power sector over our forecast period to 2026. Before the military coup that occurred on 14 th November 2017, virtually all power projects had been stalled due to a lack of funding. The uncertainty following the coup further cements our bearish outlook for the Zimbabwean power sector, with total generation expected to grow from just under 5 terawatt hours (TWh) in 2017 to 8.9TWh by 2026.

The one bright spot for growth in Zimbabwe's power generation will come from the 300 megawatt Kariba South hydropower expansion project, which is already over 90% complete and is forecast to be operational by mid-2018. Additional growth will mostly be a result improved output from existing power capacity due to factors such as water levels rising - as opposed to the commissioning of additional new projects. As the political transition is still being negotiated at the time of writing, we await the outcome before factoring in any potential changes to our forecasts.

Power Output Growth Mostly From Kariba South Expansion
Zimbabwe Total Net Generation, By Type TWh (2016-2026)
e/f = BMI estimate/forecast. Source: National Sources, BMI

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