News / National
Zimbabwe to partly pay Moza to reduce $76M Zesa's power debt
10 Apr 2012 at 21:04hrs | Views
ZIMBABWE is this week expected to pay about US$36 million to Mozambique's Hydro Cahora Bassa to reduce Zesa's power debt.
Zesa owes Hydro Cahora Bassa US$76 million.
It also emerged yesterday that Government owes various parastatals and private companies over US$170 million for services rendered.
Government claims poor revenue collection is affecting its ability to clear the debts.
On Zesa Holdings' debt clearance strategy, Energy and Power Development Minister Elton Mangoma yesterday confirmed the money will be paid this week.
He declined to disclose the amount Government was prepared to pay.
However, Zesa sources said the power utility had raised about US$36 million.
The sources said the response from domestic and commercial consumers following massive disconnections was "quite positive".
Minister Mangoma said the payment will result in Zimbabwe receiving uninterrupted power from its external sources.
"We have made tremendous progress to reduce the debt as per their demand. The money will be paid this week to ensure constant supply.
"I cannot tell you the actual amount we will pay but we are close to meeting their requirements. There are still one or two things to be finalised but I can tell you that we are almost there," he said.
Mozambique has agreed to ensure uninterrupted power supply in the interim if Zimbabwe reduces its debt to below US$40 million.
Minister Mangoma said it was impossible for the country to clear the debt at once.
He said Zimbabwe was committed to settling the debt and disconnections will continue.
"Where will the money come from? We are not able to offset the debt at once as the economy is struggling and we will continue mobilising money through various forms which include disconnections. Our wish is to clear the debt and we will continue working flat out to solve our problem."
Domestic and commercial electricity consumers owe Zesa Holdings about US$550 million.
Most residents, especially in high-density areas, are going for almost 10 hours per day without power.
The situation has been worsened by malfunctioning units at Hwange Thermal Power Station and Kariba Hydro-Power Station.
Zimbabwe requires about 2 200 megawatts daily, but generates only 1 300MW.
The remainder is met through imports from Mozambique, Zambia and the Democratic Republic of the Congo. The country is getting 25 MW from Mozambique.
Industrialists and residents last week said Zesa Holdings has a poor debt management system that has seen it failing to recoup the money owed by its customers.
Industrialists said unless Zesa implemented the prepayment system, it will find it difficult to offset foreign debts.
Zesa Holdings has no clear debt collection strategies other than disconnections.
Farmers unions recently said their members could not pay Zesa bills monthly given that they receive their payments once in six months.
Some of the farmers who owe Zesa thousands of dollars have a thriving crop worth millions of dollars on their farms.
Meanwhile, Finance Minister Tendai Biti yesterday told journalists that as at March 31 this year, Government revenues had a shortfall of US$58 million from projected collections while expected diamond revenues had fallen short by US$92 since the beginning of the year.
"We as Government have to deal with the debt we owe to the manufacturers of seeds and fertilisers. We owe them close to US$40 million and also US$20 million to
Zesa and US$20 million to Zinwa while NetOne is owed US$60 million and TelOne US$30 million," he said.
Minister Biti said Government debt to the companies and utilities was affecting service delivery and performance of the productive sector.
"The extent of our debt is huge and it is killing our productive sectors. What we are doing as the Ministry of Finance is that in the next few weeks we will try to mobilise resources so that we try to do something to liquidate our domestic debt," he said.
Actual revenue collections for January and February stood at US$488 million against targeted inflows of US$549.
Inflows from diamond sales amounted to only US$19,5 million against a projection of US$77 million as no auctions were conducted in January and February.
Zesa owes Hydro Cahora Bassa US$76 million.
It also emerged yesterday that Government owes various parastatals and private companies over US$170 million for services rendered.
Government claims poor revenue collection is affecting its ability to clear the debts.
On Zesa Holdings' debt clearance strategy, Energy and Power Development Minister Elton Mangoma yesterday confirmed the money will be paid this week.
He declined to disclose the amount Government was prepared to pay.
However, Zesa sources said the power utility had raised about US$36 million.
The sources said the response from domestic and commercial consumers following massive disconnections was "quite positive".
Minister Mangoma said the payment will result in Zimbabwe receiving uninterrupted power from its external sources.
"We have made tremendous progress to reduce the debt as per their demand. The money will be paid this week to ensure constant supply.
"I cannot tell you the actual amount we will pay but we are close to meeting their requirements. There are still one or two things to be finalised but I can tell you that we are almost there," he said.
Mozambique has agreed to ensure uninterrupted power supply in the interim if Zimbabwe reduces its debt to below US$40 million.
Minister Mangoma said it was impossible for the country to clear the debt at once.
He said Zimbabwe was committed to settling the debt and disconnections will continue.
"Where will the money come from? We are not able to offset the debt at once as the economy is struggling and we will continue mobilising money through various forms which include disconnections. Our wish is to clear the debt and we will continue working flat out to solve our problem."
Domestic and commercial electricity consumers owe Zesa Holdings about US$550 million.
Most residents, especially in high-density areas, are going for almost 10 hours per day without power.
The situation has been worsened by malfunctioning units at Hwange Thermal Power Station and Kariba Hydro-Power Station.
Zimbabwe requires about 2 200 megawatts daily, but generates only 1 300MW.
The remainder is met through imports from Mozambique, Zambia and the Democratic Republic of the Congo. The country is getting 25 MW from Mozambique.
Industrialists and residents last week said Zesa Holdings has a poor debt management system that has seen it failing to recoup the money owed by its customers.
Industrialists said unless Zesa implemented the prepayment system, it will find it difficult to offset foreign debts.
Zesa Holdings has no clear debt collection strategies other than disconnections.
Farmers unions recently said their members could not pay Zesa bills monthly given that they receive their payments once in six months.
Some of the farmers who owe Zesa thousands of dollars have a thriving crop worth millions of dollars on their farms.
Meanwhile, Finance Minister Tendai Biti yesterday told journalists that as at March 31 this year, Government revenues had a shortfall of US$58 million from projected collections while expected diamond revenues had fallen short by US$92 since the beginning of the year.
"We as Government have to deal with the debt we owe to the manufacturers of seeds and fertilisers. We owe them close to US$40 million and also US$20 million to
Zesa and US$20 million to Zinwa while NetOne is owed US$60 million and TelOne US$30 million," he said.
Minister Biti said Government debt to the companies and utilities was affecting service delivery and performance of the productive sector.
"The extent of our debt is huge and it is killing our productive sectors. What we are doing as the Ministry of Finance is that in the next few weeks we will try to mobilise resources so that we try to do something to liquidate our domestic debt," he said.
Actual revenue collections for January and February stood at US$488 million against targeted inflows of US$549.
Inflows from diamond sales amounted to only US$19,5 million against a projection of US$77 million as no auctions were conducted in January and February.
Source - TH
