HomeBusiness DigestZesa owed US$350m by consumers

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ZIMBABWE Electricity Supply Authority (Zesa) is owed close to US$350 million by domestic and industrial consumers, with more than 100 000 domestic customers in Harare and Bulawayo not having paid their bills since February last year.

The Zimbabwe Electricity Transmission and Distribution Company managing director, Ernest Machaya, said Harare has 73 000 debtors while Bulawayo has 28 178.


“Since the introduction of multiple currency system last February, in Harare we have 73 000 consumers who have not paid a cent for their bills while in Bulawayo 28 178 have also not paid,” he said.
Machaya said this while giving evidence during a Competitions and Tariff Commission investigation on Zesa in Bulawayo on Tuesday.

According to the commission, the investigation centres on “alleged abuse of monopoly by Zesa through excessive tariffs, charging electricity not consumed through estimates in billing and arbitrary cutting of electricity supplies for domestic and industrial use”.

Machaya revealed that domestic consumers owed US$128 million, commercial sector US$93 million, industries US$44 million, farming US$43 million, mining US$24 million, institutions US$10 million  and public lighting US$5 million.

On electricity usage, domestic consumers account for 37%, commercial sector 23%, industries 20%, mining 11% and farming 9%.

Machaya said both external and internal debt is impacting negatively on operations.

“Currently, external debt for power importation stands at US$100 million, a further US$156 million is owed to Zimbabwe Power Company. We are struggling to service the debt as we do not have such amounts,” he said

During the public hearing it was revealed that in January last year, Zesa lost revenue amounting to US$18 million “as no consumer was billed”.

In addition, a further US$25 million loss was incurred since February when government directed consumers to pay a fixed monthly charge of between US$30 and US$40.

Early last year, Energy minister Elias Mudzuri set “ceilings” for electricity charges after an uproar from consumers who were failing to pay the huge bills from their paltry salaries.

He announced flat charges of US$30 and US$40 for high-density and low-density residential areas respectively for the months of February, March, April and May.

To adequately fund power generation, Machaya said US$383 million capital injection was urgently required.
Zimbabwe has been experiencing excessive power cuts in the last decade due to obsolete equipment, ageing infrastructure, skills flight and massive vandalism of power cables.

Most households and industries in Zimbabwe are limited to less than 12 hours of electricity supply daily because of lack of investment in power generation.

Despite the power shortages, the country is exporting 150 megawatts to Namibia under a US$40 million deal where Namibia power utility NamPower provided capital for the refurbishment of power units at Hwange Thermal Power Station in exchange for electricity.

Several potential investors have expressed interest in power generation but the capital-intensive nature of the industry acts as a prohibitive factor and coupled with scarce foreign currency for the importation of machinery.


Nqobile Bhebhe

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