Zesa pays off $44m NamPower debt

THE Zimbabwe Electricity Supply Authority has finally paid off the $44 million debt it owed to NamPower for the refurbishment of Hwange Power Station, a situation which will see an additional 150 megawatts now directed to domestic use.

Zesa Holdings through its subsidiary, the Zimbabwe Power Company (ZPC) owed $44 357 307 to NamPower which was advanced in 2007 for the refurbishment of Hwange Power Station.

Zesa was to repay the debt by exporting 100 MW during peak periods and 150 MW off peak to Namibia daily for five years given the country's then hyperinflationary environment.

In an interview with Sunday Business, Zesa spokesman Mr Fullard Gwasira confirmed that the power utility had paid off the debt hence the clearance of the loan implied that 150 MW was now being directed to local customers, which encompass industrial, mining and domestic consumers.

"The last instalment of the loan was paid off end of January and this important development may lead to easing of load rationing; however this does not signify the end of load shedding as demand still significantly outstrips supply," said Mr Gwasira.

During the about five years it took Zesa to clear the loan, it was supplying NamPower with electricity worth between $4 and $5 million each month and the power purchase agreement with Namibia was expected to be fully met in 2012, but was extended for another year after the country failed to honour the agreement on account of persistent power generation challenges.

Mr Gwasira said consumers were however advised not to view all power outages as load shedding as faults also occur on the network and urged them to constantly liaise with the customer service centre for restoration of service.

According to Zesa the 150 MW was expected to reduce the country's power deficit which stands at about 800 MW.

Meanwhile, Mr Gwasira said the Zimbabwe Power Company (ZPC) had embarked on the extension of Kariba South Hydro Power Station by two units of 150 MW each through a loan facility from China that would cover 85 percent of the costs.

"ZPC has the mandate of raising the other 15 percent and it is finalising an agreement that should come to fruition in April 2015 wherein 80 MW of electricity would be sold to Nampower to raise the required capital," Mr Gwasira said.

According to the Zimbabwe Energy Regulatory Authority the country's power crisis is expected to ease in 2017 due to increased capacity at Hwange. Zera said that a cumulative capital expenditure of $2,5 billion was required to improve electricity generation in the country.

Captains of industry have welcomed the development to add more power to the national grid saying it would benefit industry in terms of continuity as consistent power supply would help increase capacity utilisation.

Zimbabwe National Chamber of Commerce (ZNCC) Matabeleland chapter chairperson Mr Crispen Mugova said many companies were facing challenges due to unprogrammed power cuts.

"We would expect Zesa to at least reduce their charges because what we pay here (rates) is higher compared to the region. Zesa should also do something about their infrastructure which is too old and during the rainy season, power distribution is easily affected," said Mr Mugova.