The Zimbabwe Stock Exchange (ZSE) is on a drive to lure companies in the energy sector onto the local bourse as part of efforts to help them raise capital for the implementation of energy projects.
This comes as the country is facing severe electricity shortages that have affected consumers who have been subjected to long hours of load shedding.
Implementation of independent power producers (IPP) projects remains a challenge due to unavailability of capital.
But listing on the ZSE avails an additional capital raising platform for companies. According to the bourse, between 2009 and 2017, companies listed on the ZSE managed to raise about US$463 million through different capital raising initiatives.
ZSE chief executive officer Justin Bgoni, said as the local bourse, they were cognisant of the dire electricity situation in the country as well as the capital constraints for implementation of energy investment projects.
As such, it is imperative to open capital markets for the IPPs to enable them to raise capital, through the ZSE, to operationalise their power projects and help alleviate the obtaining challenges.
“We are not interested in just increasing listings on the exchange but to provide a platform for raising capital for IPPs,” he said at a recent IPP Listing Masterclass in the capital.
“Energy is key and we want to be part of the answer to the energy situation in the country. IPPs have not realised their full potential because of funding constraints and ZSE is offering this platform for them,” he said.
The programme ran under the theme “Promoting access of ZSE platform to the public and private sectors as gateway to raising capital,” which resonates with the bourse’s vision of facilitating economic development in Zimbabwe and SADC.
This was a platform to open up the ZSE to IPPs private companies that have potential to list, discuss the benefits that private companies accrue from listing on the stock exchange as well as unpack the listing requirements and regulations.
The ZSE acknowledged that while it may be a daunting task for a private company to go public, this comes with benefits such as unlocking value and raise capital for research, expansion and infrastructure projects.
The Zimbabwe Energy Regulatory Authority (ZERA) has licensed over 77 energy generation projects. Of these, 70 are IPPs.
An estimated 38 solar projects are not operational due to funding challenges. Energy and Power Indications are that Government is in no position to fund such projects therefore calling on other alternative sources of funding to be utilised.