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Zesa debt tops US$1 billion
2 hrs ago |
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Years of below-cost electricity tariffs and mounting unpaid accounts have left ZESA Holdings burdened with more than US$1 billion in debt, threatening its ability to maintain infrastructure, repay loans and invest in new power generation.
The utility says its financial challenges have been compounded by outstanding municipal electricity bills, particularly for water pumping and sewage treatment, as well as debts owed to lenders and power suppliers.
Speaking on the sidelines of the 2026 Zimbabwe National Chamber of Commerce annual congress, Zesa Holdings senior manager for electricity trading and operations, John Diya, said the utility's debt continued to increase.
"The figures, unfortunately, I do not have offhand, but it is significant amounts. It is over a US$1 billion," Diya said.
"It went up because even for some of the current consumption, or procurements, we are not in a position to fully pay. We are partly paying for some of the power that we are receiving, which means we are adding on to the debt."
Diya attributed much of the financial burden to years during which electricity tariffs remained below the actual cost of supplying power.
He said the utility had borrowed extensively to finance expansion projects, including improvements to the national transmission grid and the expansion of the Hwange Power Station.
"Part of it, for example, we borrowed to expand the network. We borrowed to build Hwange Power Station. We borrowed to build a number of lines in the grid," he said.
"And we have not been repaying those loans at the rate that is anticipated, such that by now we would have actually completely amortised the debt.
"So, it has been accumulating together with interest."
Diya said the utility had prioritised purchasing electricity and carrying out only essential maintenance instead of servicing its debt.
"It was not adequate enough for us to procure power, to maintain the system, and then have something to pay back to the loan," he said.
"So, we are just doing the minimum, even in terms of maintenance, and then ignoring repayments."
He said Zesa had hoped the government would assume responsibility for part of its historical debt, enabling the utility to restore its borrowing capacity.
"So, we have accumulated significant debt, which we had hoped the government was going to take over; then we would start on a clean sheet, and it would be easy for us to borrow," Diya said.
Although repayments have resumed, he acknowledged that they remain insufficient to significantly reduce the outstanding debt.
"But, we are trying as much as possible to make payments, but it is like in trickles. It is not big enough for us to clear that debt in a short space of time," he said.
Diya identified local authorities as the utility's largest debtors, particularly for electricity used to operate water treatment and sewage systems.
He explained that Zesa cannot disconnect those services because doing so would create serious public health risks.
"The main challenge is to do with the councils, particularly for electricity, which is meant to pump water, to move sewage, because we are not allowed to switch them off," he said.
"You have outcries of things like cholera if we do that. So, we continue supplying them when they are not paying, which means they are the ones who actually owe us more, not the generality of the government institutions."
According to Diya, central government departments generally settle their electricity bills through arrangements coordinated by the Ministry of Finance, making local authorities the utility's principal source of unpaid accounts.
He also defended the current electricity tariff, saying the approved charge of approximately 16 US cents per kilowatt-hour, while slightly below Zesa's proposed range of 16 to 18 US cents, was close to cost-reflective levels and would help improve maintenance and the reliability of electricity supplies.
The utility says its financial challenges have been compounded by outstanding municipal electricity bills, particularly for water pumping and sewage treatment, as well as debts owed to lenders and power suppliers.
Speaking on the sidelines of the 2026 Zimbabwe National Chamber of Commerce annual congress, Zesa Holdings senior manager for electricity trading and operations, John Diya, said the utility's debt continued to increase.
"The figures, unfortunately, I do not have offhand, but it is significant amounts. It is over a US$1 billion," Diya said.
"It went up because even for some of the current consumption, or procurements, we are not in a position to fully pay. We are partly paying for some of the power that we are receiving, which means we are adding on to the debt."
Diya attributed much of the financial burden to years during which electricity tariffs remained below the actual cost of supplying power.
He said the utility had borrowed extensively to finance expansion projects, including improvements to the national transmission grid and the expansion of the Hwange Power Station.
"Part of it, for example, we borrowed to expand the network. We borrowed to build Hwange Power Station. We borrowed to build a number of lines in the grid," he said.
"And we have not been repaying those loans at the rate that is anticipated, such that by now we would have actually completely amortised the debt.
"So, it has been accumulating together with interest."
Diya said the utility had prioritised purchasing electricity and carrying out only essential maintenance instead of servicing its debt.
"It was not adequate enough for us to procure power, to maintain the system, and then have something to pay back to the loan," he said.
"So, we are just doing the minimum, even in terms of maintenance, and then ignoring repayments."
He said Zesa had hoped the government would assume responsibility for part of its historical debt, enabling the utility to restore its borrowing capacity.
"So, we have accumulated significant debt, which we had hoped the government was going to take over; then we would start on a clean sheet, and it would be easy for us to borrow," Diya said.
Although repayments have resumed, he acknowledged that they remain insufficient to significantly reduce the outstanding debt.
"But, we are trying as much as possible to make payments, but it is like in trickles. It is not big enough for us to clear that debt in a short space of time," he said.
Diya identified local authorities as the utility's largest debtors, particularly for electricity used to operate water treatment and sewage systems.
He explained that Zesa cannot disconnect those services because doing so would create serious public health risks.
"The main challenge is to do with the councils, particularly for electricity, which is meant to pump water, to move sewage, because we are not allowed to switch them off," he said.
"You have outcries of things like cholera if we do that. So, we continue supplying them when they are not paying, which means they are the ones who actually owe us more, not the generality of the government institutions."
According to Diya, central government departments generally settle their electricity bills through arrangements coordinated by the Ministry of Finance, making local authorities the utility's principal source of unpaid accounts.
He also defended the current electricity tariff, saying the approved charge of approximately 16 US cents per kilowatt-hour, while slightly below Zesa's proposed range of 16 to 18 US cents, was close to cost-reflective levels and would help improve maintenance and the reliability of electricity supplies.
Source - The Standard
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