News / National
ZESA pays coal suppliers in forex
15 Jun 2023 at 06:41hrs | Views
ZESA Holdings is now paying coal suppliers in foreign currency, a development expected to ensure smooth supply of the commodity to the expanded Hwange thermal power station.
The Coal Producers Association (CPA), a lobby group that represents the interests of local coal producers, said while the State power utility was lagging in payments, the switch to foreign currency payments had enhanced the viability of the miners.
Miners, the lobby group assured, had enough production capacity to meet the increased demand to power the new generators at the country's second-largest power plant.
The Hwange Power Station unit 7 was recently reconnected to the national grid, resulting in average production rising to 800 units. Unit 8, which together with unit 7 has combined capacity to produce 600 megawatts (300 MW apiece), is also being commissioned and is already churning out a significant amount of electricity on the national grid. In 2019, ZESA entered an agreement with coal producers to pay half of the supplies in foreign currency to enable companies to import critical consumables and spares.
But the deal was yet to be implemented due to cash constraints choking the power utility. ZESA is being paid in forex by some exporters, including mining companies, and the deal entails coal mining firms being partly paid in hard currency to sustain operations.
"They have started paying us in foreign currency and it's a welcome for us because we are an enabler in the production of electricity," CPA chairman Mr Linos Masimura said.
"However, there is a bit of a slowdown (in terms of payments) and we urge ZESA to pay on time so that coal production is not affected. We believe that we should be a priority because we are producing a product that enables us to generate power.
"Without coal, there is no power and they should pay to use it consistently," he added.
Mr Masimura said while not every coal miner was contracted to supply to ZESA to cover additional consumption by the new generators, the companies that won the bids had adequate production capacity to meet demand. "We have not heard of any potential shortage and we don't expect that. I think there is enough capacity to meet demand," Mr Masimura added.
ZESA pays US$30 per tonne. ZESA spokesperson Dr George Manyaya could not immediately provide a comment.
Meanwhile, a combination of challenges to payments and production constraints facing some regional power producers has resulted in a significant drop in imports, according to the Zimbabwe Electricity Transmission and Distribution Company.
From a potential 400 MW the country can import from Eskom, Zimbabwe is only importing roughly 70 MW due to production constraints at South Africa's power utility, Eskom.
ZETDC, a subsidiary of ZESA Holdings, said out of 150 MW the country can import from Zambia's State-owned power utility Zesco, Zimbabwe was receiving an average of 50 MW.
The "contract resumption (is) awaiting ZETDC prepayment for the month ahead," said ZETDC.
Electricidade de Moçambique is exporting only 10 MW out of a potential 200 MW due to ZETDC's outstanding debt.
The Coal Producers Association (CPA), a lobby group that represents the interests of local coal producers, said while the State power utility was lagging in payments, the switch to foreign currency payments had enhanced the viability of the miners.
Miners, the lobby group assured, had enough production capacity to meet the increased demand to power the new generators at the country's second-largest power plant.
The Hwange Power Station unit 7 was recently reconnected to the national grid, resulting in average production rising to 800 units. Unit 8, which together with unit 7 has combined capacity to produce 600 megawatts (300 MW apiece), is also being commissioned and is already churning out a significant amount of electricity on the national grid. In 2019, ZESA entered an agreement with coal producers to pay half of the supplies in foreign currency to enable companies to import critical consumables and spares.
But the deal was yet to be implemented due to cash constraints choking the power utility. ZESA is being paid in forex by some exporters, including mining companies, and the deal entails coal mining firms being partly paid in hard currency to sustain operations.
"They have started paying us in foreign currency and it's a welcome for us because we are an enabler in the production of electricity," CPA chairman Mr Linos Masimura said.
"However, there is a bit of a slowdown (in terms of payments) and we urge ZESA to pay on time so that coal production is not affected. We believe that we should be a priority because we are producing a product that enables us to generate power.
"Without coal, there is no power and they should pay to use it consistently," he added.
Mr Masimura said while not every coal miner was contracted to supply to ZESA to cover additional consumption by the new generators, the companies that won the bids had adequate production capacity to meet demand. "We have not heard of any potential shortage and we don't expect that. I think there is enough capacity to meet demand," Mr Masimura added.
ZESA pays US$30 per tonne. ZESA spokesperson Dr George Manyaya could not immediately provide a comment.
Meanwhile, a combination of challenges to payments and production constraints facing some regional power producers has resulted in a significant drop in imports, according to the Zimbabwe Electricity Transmission and Distribution Company.
From a potential 400 MW the country can import from Eskom, Zimbabwe is only importing roughly 70 MW due to production constraints at South Africa's power utility, Eskom.
ZETDC, a subsidiary of ZESA Holdings, said out of 150 MW the country can import from Zambia's State-owned power utility Zesco, Zimbabwe was receiving an average of 50 MW.
The "contract resumption (is) awaiting ZETDC prepayment for the month ahead," said ZETDC.
Electricidade de Moçambique is exporting only 10 MW out of a potential 200 MW due to ZETDC's outstanding debt.
Source - The Herald
