Zesa Holdings clears its debts to suppliers in the region

Published: 10 June 2013

Electricity load-shedding is set to ease in most parts of the country after Zesa Holdings cleared its debts to suppliers in the region, although some challenges still remain in supplying enough power, an official has said.

Giving evidence before the House of Assembly Portfolio Committee on State Enterprises and Parastatals yesterday, Zesa chief executive officer Engineer Josh Chifamba said the financial resources directed to debt alleviation would now be channelled to production.

"We owed Hydro Caborra Basa $100 million and we have managed to clear that and we are trying to ensure that we remain current," he said. "We do not owe any of our suppliers at the moment and it explains the improved supplies we have recently had."

Eng Chifamba said the $2 million they owed Snell from DRC had been settled in exchange for equipment produced by their subsidiary Zesa Enterprises.

Zimbabwe has relied on electricity imports from regional utilities to supplement local supplies that are failing to meet demand.

The country requires at least 2 200MW, but is producing only 1 200MW resulting in the necessity for imports and load shedding.

Eng Chifamba said the power utility was owed $740 million by defaulting customers with local authorities and companies like Sable Chemicals and Zimasco contributing a large chunk of the debt.

On new generation projects they are embarking on, Eng Chifamba said the expansion of Hwange and Kariba power stations was on course.

He said they signed a $390 million contract with Sino-Hydro for the extension of Kariba Power Station that will result in an additional 300MW.

Eng Chifamba said Sino-Hydro would contribute 85 percent of the cost, while they were expected to contribute the remaining 15 percent.

"We are hoping that within the first half of the year we will get financial resources so that the project can begin," he said.

"On Hwange Power Station, the technical adjudication is currently happening and we expect that by March 16, we will get to the State Procurement Board with recommendations of approved companies. That project will add an additional 600 MW."

Eng Chifamba said Zimbabwe had started paying off the $70,8 million debt owed to the Zambian government emanating from the construction of Kariba Power Station during the colonial era.

This, he said, paved way for the commencement of the implementation of the Batoka Power Project.

Zimbabwe has paid $20 million to Zambia, while another $20 million is expected to be paid by the end of next month.

The Batoka Power Project has a potential to generate 1 600 MW for both Zimbabwe and Zambia and is expected to cost $4 billion.

Zesa embarked on load shedding in the 1990s, with the situation worsening at the turn of the millennium as the power utility failed to meet demand, with its debt to regional suppliers soaring.

The load shedding affected big industries that ended up losing millions of dollars in lost hours of production, while some companies invested a lot in buying generators.

Residents in various cities have been critical of Zesa for cutting off supplies yet maintaining the high bills though customers sometimes go for days without electricity.

- TC