Zimbabwe risks being blocked from importing electricity

ZIMBABWE risks being blocked from importing electricity as Zesa Holdings owes regional utilities about $77 million, which may lead to load shedding.

The power utility relies on imports to augment supplies due to low generation capacity at home. As of yesterday, the sole power utility generated a combined 1174MW from Hwange Thermal and Kariba Hydro stations, the largest power stations in the country, while the three small thermals – Bulawayo, Harare and Munyati, were not producing anything.

Responding to questions in Parliament on Wednesday, Energy and Power Development Deputy Minister Senator Tsitsi Muzenda said non-payment by consumers has resulted in Zesa failing to service its external debt for power imports of up to 400 megawatts.

"The external debt currently stands at $77 million. There is a risk of curtailment of imports from Hydro Cahora Bassa and Eskom that may lead to load-shedding," she said.

Last September, Zesa reportedly owed Mozambique's Hydro Cahora Bassa $10 million. Sen Muzenda said the Zimbabwe Power Company (ZPC), a subsidiary of Zesa, was owed $741 million for local power purchases and this is resulting in low coal stocks as winter approaches.

Coal producers such as Hwange Colliery Company and Makomo Resources have also complained over delays in payment by Zesa, a development they said was a threat to their operations. The situation has been worsened by foreign currency shortages.

Early this year, the country's platinum miners and ferrochrome producers reached an agreement with Zesa Holdings to prepay for power directly from regional suppliers amid foreign exchange shortages in the country.

Sen Muzenda said non-payment is also negatively affecting the smooth flow of operations and provision of service delivery.

"Zesa is owed over $1 billion despite the measures being taken to recover that debt to its suppliers and it is also facing cash flow challenges," she said.

Sen Muzenda said her ministry and the power utility were making frantic efforts to recover the debt of private entities under various ministries such as Mines and Mining Development and Industry and Commerce.

"When it comes to parastatals, we are trying to engage the parent ministries, for example, in the case of the Hwange debt, we go to the Ministry of Industry and Commerce so they can at least try and persuade their parastatal to make some payments but it is not easy going," she said.

Last year, the Zimbabwe Energy Regulatory Authority shot down a proposal by Zesa to increase electricity costs by 49 percent, declaring that the average power tariff should remain pegged at 9,86 cents per kilowatt per hour.

The power utility had proposed that the average tariff be 14,69 c/kWh.