Zim steps up power import payments

Published: 31 August 2017

THE Reserve Bank of Zimbabwe and ZESA Holdings have agreed that between $5 million and $10 million per week will be paid towards servicing debt arrears to South Africa's power utility, Eskom, and Hydro Cahora Bassa (HBC) of Mozambique.

This will prevent the country from being switched off by the two power companies, which have supplied Zimbabwe with electricity to meet its shortfall.

The country currently generates just over 1 100 megawatts (MW) of electricity, inadeqauate to meet its estimated 1 600 MW demand.

Eskom supplies Zimbabwe with 300 MW of electricity daily, while HCB weighs in with 50MW.

The two suppliers have previously threatened to switch off Zimbabwe over non-payment, a development which would have seen the country reverting to load shedding, which was last experienced 19 months ago.

Previously, the RBZ had authorised ZESA to pay regional power utilities only up to $10 million a month but the new arrangement will now see ZESA paying about $40 million monthly.

Eskom and HCB are understood to be owed more than $100 million for electricity supplies.

Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, last week said the intervention was meant to avert a potentially devastating load-shedding.

"A steady electricity supply is critical and we have agreed that from now onwards we are paying Eskom of South Africa and HCB of Mozambique, the two companies that supply us with electricity, between $5 million and $10 million every week. We have had uninterrupted power supply since December 2015 and we need to build on this steady power supply the country has been enjoying since 2015 and the only way is that we should be able to pay," said Mangudya during a fundraising event in Harare last week.

ZESA has failed to liquidate arrears to Eskom and HCB, estimated to be about $80 million and $40 million respectively, due to foreign currency shortages.

Zimbabwe was first given up to May 31 to settle its obligations with Eskom but failed to adhere to an agreed payment plan to guarantee electricity supplies to the country.

Last month, Zimbabwe was only able to pay about $8 million to both Eskom and HCB.

A delegation comprising of officials from the Ministry of Energy and Power Development, RBZ and ZESA holding travelled to South Africa for discussions with Eskom last month to agree on a new payment plan.
- Fin Gaz

Tags: Payments,