Chronicle Editor
Golden Sibanda Senior Business Reporter—
POWER utility Zesa Holdings has appealed to industry to pay for electricity in advance to enable it to raise funding to clear debts and sustain imports from regional power suppliers.In its proposal ZESA has guaranteed to provide uninterrupted supply of power to industry during the period of the agreement, subject to emergencies and faults outside of its control.
The Zimbabwe Electricity Transmission and Distribution Company, a unit of Zesa, has already met Confederation of Zimbabwe Industries executives to discuss the proposal.
According to ZETDC’s proposed term sheet, the payment arrangement was designed to clear indebtedness to the two regional power utilities from which it has been getting power.
In terms of the deal, industry would make foreign currency payments to an account instructed by ZETDC, with an annual interest of 10 percent accruing on the prepaid amounts.
The prepaid amount plus interest would be converted at current power tariffs into energy credits redeemable per monthly at 40 percent of power consumed by each ZETDC client.
ZESA’s transmission and distribution subsidiary proposed that electricity consumed outside of monthly credited amount would be payable to ZETDC at existing tariff to the industry.
CZI chief executive Mr Clifford Sileya said in a circular to members that ZESA has sought assistance from industry in mobilising funding in the wake of difficulties in making foreign payments due to the shortage of foreign currency in Zimbabwe.
“As you may be aware, Zimbabwe is importing a significant amount of its power from South Africa and Mozambique, due to depressed generation from Kariba,” Mr Sileya.
“ZETDC has made an appeal to business to assist in entering into arrangement to assist ZESA in meeting its foreign payment obligations to avoid possibility load shedding.”
If ZESA failed to pay it would lose the power imports. ZESA imports significant amounts of power from Eskom in South Africa and Mozambique’s power utility, Hydro Cahorra Bassa to bridge the gap between local supply and demand.
In fact, ZESA pays about $6,5 million in advance to Eskom for power imports, which creates pressure in terms of the need for funding to maintain imports from South Africa.
Zimbabwe is facing an acute shortage of power due to limited production occasioned by old power stations with average demand at 1 400 megawatts against supply of 1 000MW.
CZI said there have been challenges in foreign currency payments to support power imports and ensure continued supply of power with hard currency allocations by RBZ falling short.
Shortage of power, however, is set to become a thing of the past, with ZESA’s 300MW capacity extension at Kariba South hydro power station now at 61 percent to completion.
The first phase of ZESA’s expansion to the 750MW existing capacity is expected to come on line in 2017 and the next phase would start feeding the power grid sometime in 2018.
Government, through ZESA, has also contracted $1,4 billion Sino Hydro of China, which is also doing the Kariba expansion, for the 600MW extension of Hwange Power Station.
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