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Zesa warns of power deficits power deficits

Eric Chiriga

THE Zimbabwe Electricity Supply Authority (Zesa) has warned that the country could face serious power deficits due to low coal supplies at all stations and falling water levels to drive the turb

ines at Kariba Power Station.

Zesa Holdings chairman and chief executive, Sydney Gata, said the country was faced with serious “energy security threats”.

In a paper titled “Electricity Power Overview” presented at a Zimtrade exporters’ conference in Harare earlier this week, Gata said Zesa tariffs were sub-economic.

Gata cited six major “energy security threats” that he said could plunge the country into darkness.

These include the “hydrological risk” at Kariba Power station due to persistent drought, a shortage of coal at all thermal power stations, the expected power deficit in the Sadc region and tougher new import terms for Zimbabwe in the period 2006 to 2008.

Experts have warned that the Sadc region faces critical power shortages in 2007. This could severely affect Zimbabwe which imports much of its power from Eskom in South Africa, Snel in the DRC and Cahora Bassa in Mozambique.

Gata said the power utility was struggling to pay for current power imports from South Africa and Mozambique.

Zimbabwe is reeling under biting fuel and foreign currency shortages that have all but grounded the national airline, Air Zimbabwe. Power outages at peak hours have become a daily experience for most domestic users.

“All new import contracts are now under much tougher terms and conditions for Zimbabwe,” Gata said.

Gata said the country only has one “firm” power import contract for 2005 with Snel of the Democratic Republic of Congo. The contract is for only 150 megawatts (MW).

Gata projected that an extra 1 950 MW would be needed to meet the anticipated increased demand in the next three years.

“An extra 450 MW are required for the new irrigation and rural electrification loads, 650 MW to displace current imports, 250 MW for spinning reserve and 600 MW to support forecast economic turnaround and gross domestic product growth,” Gata said.

The power utility requires US$13 million a month to import electricity, service debts and buy spares for refurbishment at its power stations across the country.

Zesa generates 68% (1 440 MW) of national requirements from Kariba Power Station (750 MW), Hwange Power Station (590 MW) and the balance of 100 MW from small internal thermal power stations.

Imports of 650 MW account for 32% of national requirements from Eskom (300 MW), Hydroelectrica de Cahora Bassa (250 MW) and 100 MW from Snel in the DRC.

Gata said local funding for the Expanded Rural Electrification Programme (Erep) was inadequate and that government had not given them any support since inception.

“Government funding is still not available from inception of Erep.” He said financing was currently from the 6% rural electrification levy, Megawatt Bills and a loan facility from the Reserve Bank.

Gata said the bills were too expensive because of the high interest rates while debt funding for rural infrastructure “is simply inappropriate, anywhere, anytime”.

External funding is in the form of a loan facility from an Indian firm and China amounting to US$40 million and US$110 million respectively. According to the paper, Zesa has a backlog of 12 176 customers who are paid up but have not been connected. This is an increase from 5 653 in 2002.

He said the severe shortage of foreign currency and suspension of regular annual tariff reviews in 2003 and 2004 were the major causes of the huge backlog.

The power utility has also failed to meet its target for the rural electrification programme after it electrified only 3 902 projects out of the 5 000.

He said for the rural electrification programme to function effectively, Zesa would need government capital grants, low interest rate funds and priority on foreign currency allocations to meet existing obligations.

Gata said plans were underway to invest in the electricity sector at a total cost of US$2,09 billion between now and 2010. These include distribution projects worth US$247 million, power telecommunications of US$22 million and other transmission projects of US$372 million.

Zesa is courting investors from Iran and China to finance these projects. Zesa is also exporting tobacco and cotton to offset debts incurred during the rural electrification programme.

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