Zimbabwe has awarded a US$1.3 billion tender to a newly-formed opaque British registered company, Coven Energy, for the construction of a second oil pipeline from Mozambican city of Beira to Zimbabwe’s capital Harare. Announcing the deal, the Minister of Information, Publicity and Broadcasting Services Monica Mutsvangwa said the project will create employment opportunities and generate foreign currency for the country. The Minister also noted that the pipeline will also help reduce vehicular congestion and smuggling of petroleum products.
This project comes at a time when the country is failing to fully utilise the existing oil pipeline from Beira to Msasa in Harare in order to curb the challenges the Minister highlighted. This intention to make Harare the regional fuel hub for other landlocked countries in the Southern African Development Community will come with environmental, economic and social cost for Zimbabwe.
Huge projects like this one require large tracts of land and this will result in displacements of people along the route of the pipeline. The project also places Harare as the regional hub for dirty energy and is contrary to President Emmerson Mnangagwa’s promise to transform Zimbabwe into a Green Economy by 2030. The country is also witnessing massive coal exploration projects, mostly by China, in Hwange district. This is against the backdrop of devastating impacts of floods, cyclones, droughts and increasing manifestations of extreme weather that are leaving a trail of destruction in its wake. A recently released United Nations Intergovernmental Panel on Climate Change report on the state of global climate science warns that climate change’s disastrous consequences will lead to the destruction of natural habitats if the world does not drastically cut greenhouse gas emissions in the next 20 years. By positioning itself as a regional hub for dirty energy, Zimbabwe is also announcing itself as the future regional epicentre for greenhouse gas emissions
Zimbabwe ratified the Paris Global Climate Agreement (17 August 2017) as a demonstration of its commitment to deal with climate change. Under the agreement, Zimbabwe committed to reducing its per capita energy emissions by 33% by 2030. The country has a Climate Change Response Strategy which promotes decarbonisation of all economic activities. The National Renewable Energy Policy supports the harnessing of the country’s untapped renewable energy sources. SDG 7 (Affordable and clean energy- ensuring access to affordable, reliable, sustainable and modern energy for all) and SDG 13 (Climate action to combat climate and its impacts) in the context of energy provisions under a changing climate are at the centre of the country’s vision 2030 agenda. Against these progressive policy documents, it is surprising to witness plans for massive infrastructure construction for dirty energy.
The Centre for Natural Resource Governance (CNRG) believes the same amount of money to be invested in a pipeline can still be invested in renewable energy infrastructure with more sustainable, environmentally friendly and economically inclusive outcomes considering that continuous reliance on fossils has been linked to flooding and drought and other catastrophic events by the IPCC August 2021 report. But, even before the IPCC report, the world has experienced devastating natural disasters like cyclones, wildfires, landslides, floods and volcanic eruptions this year already evidence that it’s no longer business as usual. Investing such an amount into solar and wind energy projects and also manufacturing of lithium batteries for electrical vehicles whose demand is on the rise could bring a lot of profits for Zimbabwe in the long run.
The latest deal also raises serious transparency and accountability issues. The deal financing strategies have not been made public and this might have a burden on the taxpayer. What has been mentioned is that the Government of Zimbabwe is going into a 50:50 partnership with Coven Energy that will last for 30 years. Major contractual details have not been made public. The company awarded the deal, Coven Energy Ltd, was only registered in August 2020 in Britain and its South African subsidiary was registered in April 2021. The company has no proven track record of implementing such projects. Its capacity has never been tested anywhere. Equally concerning is the absence of an open tender process to select the contractor. Unclear procurement issues have been leading to massive capital flight in Zimbabwe in the past.
There are also serious questions on whether Zimbabwe needs a second Beira – Harare pipeline given that the existing pipeline is reportedly being underutilized by 40%. The Mozambican government even advised their Zimbabwean counterpart to upgrade the existing pipeline as opposed to constructing a new one.
CNRG, therefore, calls on the Zimbabwe government to:
• Implement the country’s progressive Agenda 2030 as outlined by His Excellency, President Emmerson Mnangagwa.
• Such megadeals should be tabled before parliament for debate before the Presidents signs.
• Halt the proposal for a second oil pipeline linking Beira and Harare and prioritise the use of the existing one so that it can operate to full capacity.
• Invest the same amount into building infrastructure for renewable energy.
• Pursue a democratic and transparent process on decisions that involve state companies such as the National Oil Infrastructure Company of Zimbabwe (NOIC).
• Follow the public tender process
This article was written by the Centre for Resource Governance (Zimbabwe) and originally published on their website and is republished here with their permission.
