RBZ Adopts US$417m Zesa Debt

THE Reserve Bank of Zimbabwe (RBZ) has taken over Zesa Holdings’ staggering debt of US$417 million owed to Mozambique’s power utility, Hidro-electrica Cahorra Bassa (HCB), businessdigest can reveal.

 

Zesa Holdings chief executive Ben Rafemoyo said the RBZ had ring-fenced the debt and has been financing debt repayments directly to HCB.

“The accumulated debt has been ring-fenced by the RBZ,” Rafemoyo said in an interview with businessdigest.

“They are now financing it. We are not aware how much they have paid so far but we know that they took over the debt when it was around US$417 million.”

Zesa has been battling to pay the debt which had accumulated over a number of years. This has seen regional power utilities cutting off power supplies to Zimbabwe.

HCB together with DRC-based Snel have been Zimbabwe’s most reliable suppliers of electricity over the past two years.

South African’s Eskom backed out of previous arrangements citing growing electricity demand in South Africa.

Eskom’s contract with Zesa is no longer firm and it now only provides electricity when it has excess capacity. Zesa has a firm contract of 200 Megawatts (MW) with HCB.

This means Zesa will receive 200 MW of electricity daily from HCB regardless of whatever challenges it is facing.

Businessdigest is also reliably informed that the RBZ grabbed US$14 million paid into Zesa’s foreign currency account (FCA) by manufacturing and mining companies that pay for electricity imported from HCB.

As of last week, the RBZ was reported to have only reimbursed US$5 million of the amount it is alleged to have diverted.

A number of mining and manufacturing companies pay for uninterrupted power imports from regional power utilities in foreign currency following the failure by Zesa to generate adequate electricity required by the country.

Rafemoyo would not confirm these claims saying: “My comments are reserved.” He however said challenges existed which had seen both the RBZ and a number of banking institutions implicated.

Rafemoyo said in certain instances, banks had failed to make foreign currency payments into Zesa’s FCA account despite explicit instructions from clients. He also said that the RBZ had been liable in other situations.

“There have been challenges,” Rafemoyo said.

“Some of the fault lies with banks, some with the RBZ. In the process, HCB has suffered. It is being worked out. But we are current with our payments. There are no arrears.”

However, central bank governor Gideon Gono vehemently disputed that RBZ had ring-fenced Zesa’s debt and that it had seized payments made by manufacturers and miners. Gono said the claims were wild lies and false.

“Be careful to be misled in a defamatory and libellous way,” Gono said. “Banking is about confidence and we will not break that tradition but rest assured, you are being led (down) the garden path.”

Gono said the RBZ was repeatedly providing financial support through foreign exchange allocations to Zesa. Zesa currently imports an average of 700 Mw a day and is at its lowest generating output in years.

By Kuda Chikwanda