HomePoliticsZesa arrears climb to US$110m

Zesa arrears climb to US$110m

Ngoni Chanakira

ZESA needs US$10,9 million a month to operate and has arrears amounting to US$109,7 million owed to regional power utilities supplying energy to Zimbabwe.

“Verdana, Arial, Helvetica, sans-serif”>Zesa executive chairman Sydney Gata yesterday told business leaders at a breakfast meeting that government was offloading its stake in the company to lure the private sector – both local and international – in a bid to raise the outstanding amount.

In a presentation made on his behalf by Zesa grid asset manager, Cletus Nyachowe, Gata said the power utility had foreign loans amounting to US$145,2 million.

Top of the list is Hydro Cahora Bassa of Mozambique, which is owed US$22 million, South Africa’s Eskom (US$11 million), Snel of the Democratic Republic of Congo (US$5 million), EDM of Mozambique (US$5 million), and Zesco of Zambia (US$5 million).

Zesa’s generation amounts to 1 770 megawatts and it imports 650 megawatts.

HCB supplies 400 megawatts, Snel (100 megawatts), and Eskom (150 megawatts).

Gata said Zesa desperately needed spares worth US$7,5 million to upgrade its dilapidated facilities countrywide.

The executive chairman said US$5 million was needed monthly for power imports, US$5 million for debt service, US$500 000 for wheeling charges, and US$350 000 for spares.

Gata said: “Our major constraints and challenges are the curtailment of imports due to non-payment, increase in arrears due to non-payment, inability to service existing debt, and shortage of spares for generation plants.”

He said the company was also facing a shortage of coal caused by the transport problems at Wankie Colliery Company Ltd.

The Minister of Energy and Power Development, Amos Midzi, who attended the breakfast meeting said the major headache at Zesa was that investors were not interested in the power utility because of government’s majority stake in the firm.

He said there was reluctance among investors to inject money in entities in which government had a majority shareholding.

Midzi said: “The economy is severely affected at the moment. Zesa is supplying 65% of our power. The rest is imported. There has been no investment in the power industry for the past 16 years. There has been no injection of money because we are facing a serious foreign currency situation.”

He said government was now rethinking on subsidies and could increase tariffs soon because they were sub-economic.

“We need to invest in Zesa right now because in 2007 there won’t be adequate electricity in the region,” Midzi said.

The minister said Hwange and Kariba also needed private investors to inject money to upgrade their facilities.

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