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Oliver Kazunga/Leonard Ncube, Business Reporters
ENERGY and Power Development Minister, Advocate Fortune Chasi, has advised exporters to consider paying their electricity bills in foreign currency to assist the country in raising critical resources for power generation and imports.
This suggestion comes at a time when the mining industry alone is said to owe the power utility, ZESA, about $200 million. If embraced, the forex payment model could raise about US$11 million per month against an estimated US$14 million required for power imports, he said.
Government has said the prevailing load shedding as a result of subdued local power generation was impacting negatively on production hence the need to find ways of increasing power imports.
“It is proposed that exporters pay their electricity bills in foreign currency in proportion to their foreign currency retention percentage,” said Minister Chasi.
He said the arrangement if implemented was expected to raise $11 million against an estimated bill of $14 million per month.
“A Statutory Instrument to this effect is being considered. The foreign currency generated would go towards meeting power import bills plus a portion for the amortisation of arrears,” said Minister Chasi.
Adv Chasi said this in Parliament where he explained that a portion of the money to be raised through payment of bills in forex would also be used to fund the procurement of critical generation spares to sustain power generation at Hwange Thermal Power plant.
In his address to mining executives during the Chamber of Mines Conference in Victoria Falls on Friday, Minister Chasi said electricity difficulties being experienced were not peculiar to Zimbabwe as the region was also suffering from supply deficit.
“The electricity sector is experiencing supply challenges which has forced Zesa to implementing load shedding. Going forward we are going to engage the mining industry to ensure predictive distribution of power,” he said.
Minister Chasi said the mining industry owes the power utility more than $200 million and was therefore appealing to the sector to settle the bills or make payment plans.
The minister said power shortage was mainly as a result of reduced power generation at Kariba Hydro- Power Station and thermal power stations, which need equipment upgrades.
Earlier, the miners had bemoaned unscheduled power outages saying this would affect productivity and stifle efforts towards meeting targets set for each sector. The mining sector consumes about 40 percent of power.
Adv Chasi, however, said replacement of 2 000 vandalised transformers would see power restored to over 25 000 customers that have gone for long periods without electricity. These include schools, clinics, growthpoints, farms, businesses and domestic consumers.
Minister Chasi said urgent support of RTGS$63 million monthly from Treasury is required to enable the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to continue supplying electricity to the nation as well as support economic activities.
“With the current tariff, ZETDC is collecting between RTGS$60 and RTGS$70 million against a monthly budget of RTGS$130 million to cover the bare essentials. Zesa is technically insolvent,” said Minister Chasi.
He said ZETDC was therefore struggling to fully fund operations and if not addresed, the severe cash flow crisis being experienced could see operations grinding to a halt.
Minister Chasi said the price of critical generation consumables required by the power utility had increased by 250 percent while suppliers of coal to ZESA were agitating for a price review. Hwange Colliery Company Limited, Makomo Resources and Zambezi Gas, all in Matabeleland North province are supplying the coal.
Once the economy stabilises, Adv Chasi said, ZESA should be allowed to have a staggered approach to increasing tariffs in order to achieve cost reflectivity or in sync with economic activity.
He said a number of priority projects were being pursued that need to be executed diligently. -@okazunga
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