THE cash-strapped Zimbabwe Electricity Supply Authority (Zesa) has taken up tobacco contract farming to raise foreign currency for power imports and expansion of its generation capacity.
The development comes barely a month after a telecommunications company, TeleAccess, turned to contract tobacco farming and mining in a bid to raise US$160 million needed to import equipment for its network rollout.
Zesa needs US$40 million to repay China National Aero Technology Import Export Corporation (Catic) for investments in power generation in the country. In the current season the power utility is understood to have sponsored 3 900 hectares of Virginia tobacco planted by both A1 and A2 farmers throughout the country.
Zesa Holdings group stakeholder relations manager Fullard Gwasira confirmed that his organisation had ventured into farming to raise money to pay back Catic.
“Zesa’s participation in the tobacco export sector is intended to raise the necessary foreign exchange to amortise the investments from China,” Gwasira said. “The agreement between Zesa and Catic of China is worth about US$40 million.”He said Zesa Enterprises, a subsidiary of Zesa Holdings, had signed an agreement with Catic for the expansion of Hwange and Kariba power stations.
“This agreement is already operational and work on the expansion programme is set to commence early next year,” he said.
“The tobacco contract-growing scheme has so far seen flue-cured tobacco planted on 3 557 hectares of land. US$20 million is expected to be harvested by these farmers.
“Another 105 small-scale farmers are expected to be contracted soon to grow 400 hectares of flue-cured tobacco. The hectarage is planned to increase to 10 000 by 2006 for export to China,” Gwasira said.
As of March this year, Zesa needed to raise US$543 million to recapitalise the Kariba and Hwange power stations.
Zesa requires US$17 million a month to meet power import requirements, operational costs and to settle debts.
The power utility has a capacity to generate only 65% of the country’s requirements. The remaining 35% is imported from Eskom of South Africa, Hydro Cahora Bassa of Mozambique and Snel of the Democratic Republic of Congo.