HomeBusiness DigestZesa reduces payment arrears

Zesa reduces payment arrears

Ngoni Chanakira

THE Zimbabwe Electricity Supply Authority (Zesa) says it has drastically reduced total power import payment arrears to neighbouring countries.

ial, Helvetica, sans-serif”>Zesa general manager (corporate affairs) Obert Nyatanga yesterday said in June last year the parastatal owed creditors US$109,7 million for electricity imports which had now been reduced to US$56 million.

Last year, Zesa owed Mozambique’s Hydro Cahhora Bassa (HCB) US$22 million, South Africa’s Eskom US$11 million, Snel of the Democratic Republic of the Congo US$5 million, Mozambique’s EDM US$5 million and Zambia’s Zesco US$4 million.

During this period Zesa fell out of favour with all its creditors so it was being forced to pay cash upfront before power supplies could be sent to Zimbabwe, facing a serious foreign currency shortage.

Nyatanga said as of yesterday Zesa owed HCB US$22 million, Eskom US$16 million, Snel US$5 million, EDM US$9,5 million and Zesco US$3,5 million.

“Our total electricity import arrears now stand at US$56 million,” Nyatanga said. “We are finding it extremely difficult to source foreign currency for the payments. Even the Reserve Bank’s foreign currency auction system is not helping us that much because we are not getting the amounts we need.”

Nyatanga said gone were the days when the parastatal was given power without paying upfront.

Last year HCB supplies were curtailed from 400 megawatts to 250 megawatts for peak periods.

HCB secured alternative markets for the power.

The company then gave notice to terminate supply contracts unless a payment plan was put in place.

Eskom, on the other hand, began demanding advance payment for their power.

The South African company classified Zesa as an interruptible customer due to payment problems.

Eskom then began charging Zesa a 12% penalty each month for defaulting on payments.

“We can’t afford to pay,” Nyatanga said. “All that we now get we have to pay upfront. Gone are the good old days when we used to get the power.

We also have to pay a portion to settle our arrears when we make payments for the supplies that we ask for.”

He said all current imports from HCB, Eskom and Snel were now being paid for in advance.

“Prepayments for current imports must include a portion for debt-servicing,” Nyatanga said.

He said the parastatal needed US$5,5 million for prepayment of power imports each month, US$5 million for debt service, US$1 million for wheeling charges, and US$1,5 million for spares.

Zesa began charging exporting customers in foreign currency from December to February when the Reserve Bank of Zimbabwe decided to stop them from doing so.

“Arrears during the mandatory billing period stand at US$4,3 million as at May 20 and over 90 days,” Nyatanga said. “However, arrears can now be paid off in Zimbabwe dollars at the auction rate. There are temporary tariff discounts being offered from the March electricity bills.”

He said the required foreign currency was now being sourced from the RBZ for prepayment of power imports, servicing of electricity import arrears, spares, and operational and maintenance works.

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