Eskom to cut power supplies to Zimbabwe

South African power utility, Eskom, has given Zesa Holdings until the end of this month to clear its debt of $43 million, failure of which it threatens to cut 300 megawatts from the amount it is supplying Zimbabwe per day, raising fears of load-shedding.

Zesa Holdings has managed to pay off Eskom $46 million, leaving a balance of $43 million.

The power utility also owes Hydro Cahora Bassa of Mozambique $40 million.

Eskom wrote to Zesa stating that "no further lenience or accommodation" would be given to Zimbabwe with effect from June 1 with regards to the outstanding debt.

Zesa earlier this year made payment plans with regional power utilities, but foreign currency shortages have seen it defaulting.

The payment plan with Eskom, which included 2016 arrears, indicate Zesa should have paid $89 million between January and April this year.

Zesa chief executive Engineer Josh Chifamba confirmed their predicament, but said "things are under control".

"We are getting support from the Reserve Bank of Zimbabwe and some of our customers who are into exports, particularly ferro chrome ones," he said.

"We are confident that the issue will be resolved in good time to avert disruption to power supply. It's under control."

Zimbabwe has been enjoying steady power supplies for the past 16 months owing to various initiatives, which included imports.

In a letter to Eng Chifamba, Eskom interim group chief executive Mr Matshela Koko said the repayment plan should be restored "as soon as possible" or power supplies would be "curtailed".

"It is unfortunate that Zesa has not been able to adhere to this payment plan," Mr Koko said in the letter dated April 24.

"The balance as at end of March 2017 according to the plan should have been R484 721 980, but the actual balance was R603 176 479, leaving a shortfall of approximately R118 454 499.

"I refer to your finance director's request to our Mr Segomoco Scheppers requesting further accommodation by Eskom by allowing Eskom's remedial action as provided for to be delayed to end May 2017.

"It is indicated in that correspondence that Zesa is confident that steps to remedy the arrear debt would have been finalised by that date."

Mr Koko went on: "Eskom do hereby confirms acceptance of this request and requires that; the current outstanding debt should not increase and Zesa shall take all steps necessary to ensure the outstanding balance as at 14 April, 2017 is maintained or preferably reduced, Zesa will restore the repayment plan by ensuring that as at end May 2017, the outstanding balance, including all subsequent invoices will be R491 416 426 or less. Kindly confirm Zesa's acceptance of this accommodation being offered by  Eskom.

"Kindly note that no further lenience or accommodation will be made in this regard and Eskom will draw down on the guarantee, raise the appropriate interest charges and curtail supply immediately should the balance not align with this proposal as at 31 May 2017."

To back up power imports, Government recently issued a R500 million ($35 million) guarantee to Eskom and it is that surety that the latter is threatening to call up.

Sources said a concrete plan was needed to avert a major power crisis.