Zimbabwe has reversed one of the defining reforms of its electricity sector, bringing generation and transmission back under Zesa after the two functions were separated in the 1990s. The rebundling marks a significant departure from the utility model adopted across much of Africa, where separating generation, transmission and distribution was intended to improve accountability, introduce competition and make the sector more attractive to investment. Zimbabwe is now betting that greater institutional integration can do what separation has failed to deliver.
Zesa has continued to operate in an environment of chronic power shortages, ageing generation infrastructure, dependence on imports and limited financial capacity. Separating the businesses created distinct entities, but it did not by itself solve the harder problems underneath them: generating enough electricity, maintaining the network, collecting sufficient revenue and creating enough confidence for investors to finance new capacity.
Rebundling generation and transmission changes where responsibility sits. Instead of having separate institutions managing the production of electricity and the network that transports it, the two functions will again operate within the same Zesa structure. That could make coordination easier, particularly when new generation projects require transmission investment at the same time. It can also make it easier for one institution to plan generation and grid development together rather than negotiating between separate corporate entities.
Private developers still need predictable tariffs, credible payment arrangements and confidence that contracts will be honoured. Zimbabwe is simultaneously trying to attract private investment into projects such as solar and waste-to-energy while expanding the grid and regional interconnections. An integrated utility can coordinate those investments more easily, but investors will still ultimately assess whether the utility can pay for the electricity it purchases and whether the regulatory environment provides sufficient protection for long-term capital.
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That is what makes Zimbabwe’s reversal worth watching beyond Zimbabwe itself. The lesson is not that unbundling was necessarily wrong or that rebundling is necessarily better. It is that the structure of a utility is only one part of the electricity problem. A country can separate generation from transmission and still fail to attract capital; it can put them back together and still face the same financing constraints. Zimbabwe is now testing whether tighter institutional control can improve execution — while having to prove that the underlying economics of its power sector have changed as well.
