Zesa owed ZWG 14 billion

The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) is grappling with debts exceeding ZWG14 billion, with local authorities and the industrial ferrochrome sector emerging as the largest defaulters, it has been revealed.

Following the deferral of ZWG2.87 billion to 2026, the net debt currently stands at ZWG11.58 billion. The industrial ferrochrome sector owes ZWG4.63 billion, accounting for 32 percent of the total debt, while local authorities are responsible for approximately ZWG2 billion, representing 14 percent. Other major contributors include the commercial sector, with debts of ZWG2.94 billion, and the mining sector, which owes ZWG1.95 billion.

The mounting arrears have undermined Zesa's operational capacity, hampered infrastructure maintenance, and deterred potential investors critical to addressing Zimbabwe's power deficit.

Acting Zesa Holdings chief executive officer, Engineer Cletus Nyachowe, disclosed the figures during a recent meeting with parliamentarians in Hwange. He noted that despite interventions, debts from local authorities continue to rise, placing significant strain on the utility.

"Local authorities are one of the biggest debtors. We have discussed with the Minister of Finance and they did offset at some stage," Engineer Nyachowe said. He added that central government directives require municipalities and rural district councils to operate with financial autonomy and fulfil their obligations.

Zesa emphasized the importance of collecting payments to sustain electricity supply and investor confidence. "We are owed a lot of money, and you know the sensitivity - it is water, sewer and so forth. To switch that off, you know what comes with it. So we really need to have that debt sorted out. And it is a big, big issue," Nyachowe said.

The acting CEO highlighted that some progress has been made through debt offsetting arrangements with government departments, amounting to over a billion Zimbabwean dollars. He stressed that for the electricity sector to remain sustainable, consumers must pay for what they use.

"This not only helps bring investor confidence. There are people building power stations for their own consumption and even putting extra capacity, which is then sold to Zesa. If people do not pay, we cannot pay for it and investors lose confidence," Nyachowe added.

The growing arrears from local authorities not only affect Zesa's ability to remunerate independent power producers but also deprive the utility of crucial capital needed to refurbish ageing infrastructure and invest in new generation projects.