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Power imports cost Zesa US$17m monthly

by Staff reporter
27 Jul 2022 at 06:27hrs | Views
THE Zimbabwe Electricity Supply Authority (Zesa) requires US$17 million per month for power importation to augment local supplies which are set to receive a major boost with coming on line of Hwange units 7 and 8 extension project progress, executive chairman, Dr Sydney Gata has said.

The US$1,4 billion Hwange Thermal Power Station Unit 7 and 8 expansion project set to ease power cuts in Zimbabwe in line with Vision 2030 is at 90 percent complete and on course to meet set deadlines.

Projected to inject an additional 600 megawatts to the national grid, the first unit of the project is set for commissioning in November this year with the remainder coming on board in the first quarter of 2023.

The country's power generation capacity is subdued at around 1 300MW with demand hovering around 1 750MW, according to official statistics.

Dr Gata, during a handover of 35 service vehicles said that Zesa has secured 300MW firm power from EDM, HCB of Mozambique, Eskom of South Africa , and Zesco in Zambia.

However, he said US$17 million is required every month to pay for imports.

"Zesa continues to engage relevant Government ministries to have Zesa capacitated to raise foreign currency to pay for imports as we need US$17 million monthly for this.

"(It) continues to engage relevant Government ministries and the Regulator to have Zesa capacitated to maintain a cost reflective tariff and also maintain the same. This will allow Zesa to pay for its obligations and not accumulate debt and in the process become credible," said.

He added that Zesa has facilitated the creation of the Intensive Energy Users Group (IEUG) which is meant to procure its own power requirements from the region and from local supplies. This is meant to remove the pressure and risk of securing power from Zesa.

Dr Gata said the power unit was striving to capacitate the business, break even and deliver excellent quality service, it is owed US$62 million and $17 billion by customers.

Zesa Holding executive chairman Dr Sydney Gata

"We have since embarked on an aggressive debt collection blitz to recover what is owed to us. Just this past weekend we disconnected various defaulters. In line with our communication strategy, ZETDC will be publishing the updated load curtailment schedule and the power supply status updates to keep our clients informed and allow them to plan accordingly."

Government recently granted Zesa the greenlight to bill exporters in foreign currency with proceeds to be channelled to procurement of critical assets and components needed to maintain power generation and repayment of external loans.

 Dr Gata said the Hwange 7 and 8 extension project progress is going on well and will add 600MW to the national grid once completed

Meanwhile, Dr Gata said ZETDC has a gap of 2 000 vehicles to reach the optimal fleet size saying most vehicles in the existing fleet have reached end of life.

As a short term strategy, ZETDC has been hiring vehicles from individuals, he said.

"In the 2022 procurement plan, ZETDC targeted to procure at least one thousand (1 000) various operational vehicles distributed as follows:

"To augment our strategy, ZETDC has incorporated requirements for additional vehicles to spearhead Zesa/REG project. This is a project we have partnered with our counterparts from the Rwanda Energy Group (REG) and we will soon be advising the nation on.

"The Zesa REG relationship will see 280 being procured for various projects including access projects, grid reinforcement and smart metering projects.

"Furthermore, we continue to focus on Excellent Customer Experience and Enhanced Operational Efficiencies and you have noted that ZETDC operations had been affected by lack of adequate cable fault location equipment. As a result, there has been challenges in timely rectifying faults as regions shared the limited cable fault location equipment."

Due to the cash flow challenges that continue to be exacerbated by the non-cost reflective tariff, he said they struggle timely implement the supply and delivery of cable fault location equipment.

 However, ZETDC was able to secure funding from Afreximbank to the tune of USD188 million and part of the funding was channelled towards the procurement of cable fault location equipment, he noted.

"The objective of procuring an operational vehicle is to improve project implementation and fault attendance turnaround time as our business is centred on customer centricity. Furthermore, from an industrial relations perspective, providing the adequate resources improve the employee engagement and motivation.

"To this end, ZETDC has awarded contracts for the delivery of 589 vehicles during the first half of 2022 and will continue to look for resources until the target has been met.

"As of today we have received 30 operational vehicles and 2 personal issues vehicles for our Engineers as per the contractual obligations. Seven (7) lorries are already in Harare undergoing pre-delivery inspection. We expect delivery of 8 more lorries in September 2022."

Last year, President Mnangagwa launched the Zesa retooling initiative, where he officially presided over the handover of the first batch of the operational fleet.

Source - The Chronicle