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Golden Sibanda and Michael Tome
Zimbabwe has moved to engage directly the governments of South Africa and Mozambique over payment plans to clear outstanding debts for power imports, as it steps up efforts to ease a crippling power deficit, a senior official said.
The commencement of negotiations over the multi-million dollar debts is expected to unlock 400-600 megawatts (MW) into the power grid and resolve the acute shortages buffeting the economy.
Inadequate electricity sees State power utility Zesa resorting to regular black outs stretching up to 18 hours to balance the deficit between supply and demand.
The acute shortage has hit hard on the operations of commerce and industry, already battling asphyxiating foreign currency shortages, by forcing them to run on expensive fuel powered generators for hours on end.
Zimbabwe is currently facing a serious hurdle getting imports from the region, amid the worsening US dollar crunch, having previously failed to pay to settle all its import bills to regional utilities; Eskom of South Africa and Hydro Cahora Bassa of Mozambique.
This also comes as the Ministry of Energy and Power Development said there was urgent need to increase the power tariff, which has dropped to sub-economic level of less than US 1 cent per kilowatt hour.
Energy and Power Development Deputy Minister Magna Mudyiwa, told a Zimbabwe National Chamber of Commerce breakfast meeting this week that given the power imports debt of US$80 million (less now after the US$10 million recently paid to Eskom), Government had stepped in to find a way through.
“Given the US$80 million owed to HCB of Mozambique and Eskom of South Africa, Government has stepped in to negotiate directly with the governments of these utilities.
“Successful negotiations, based on payment plans to settle the debts are expected to yield 400-600MW of power,” Minister Mudyiwa told delegates at the meeting.
On Wednesday Energy and Power Development Minister Fortune Chasi, who had just returned from South Africa, told the media that he had fruitful dialogue with his counterpart Gwede Mantashe for him to facilitate power imports from Eskom.
Zimbabwe used to get up to 350MW from Eskom, on a non-firm contract basis and up to 100MW from Mozambique’s HCB (50MW firm and 50MW non-firm), before Kariba extension reduced the amount of imports required.
However, an inadvertent fall in Kariba Dam water, which has rated capacity of 1050MW, levels due to drought experienced last year has drastically affected the country’s ability to meet the bulk of its needs from local generation facilities.
The aged equipment at 920MW rated Hwange Power Station, however, can now only afford an average of 450-55MW, has seriously constrained reliability and capacity to produce at optimum levels.
Demand for power in Zimbabwe at peak periods (mornings and evenings) stands at an average 1 800MW, but the constraints from very old equipment and foreign currency shortages to buy spares and equipment see it produce just about 800MW.
The country’s three other small (thermal) power stations namely Bulawayo, Munyati and Harare are also, just like Hwange, past their “sell by dates”, making their contribution to output very little and inconsequential to the situation.
Because of this situation, Zimbabwe needs to imports from region and South Africa as well as Mozambique have been the major sources of power until the country fell far behind on its debt service obligations.
Deputy Minister Mudyiwa said her ministry was seeking an interim bridging funding package while a tariff review was being considered to make sure power utility Zesa get adequate revenues to sustain operations.
Already, Zesa is owed $1,2 billion by private sector, Government entities and household, which further makes more difficult for the State power utility to meet its obligations and improve power supply.
Minister Mudyiwa called on all consumers of power to embrace a higher electricity tariff to assist the utility in proving power.
“Profits (by private sector) are good, but for the utility to remain operational, it has to service its debts, procure resources and maintain equipment,” she said.
The energy deputy minister said Cabinet had also approved ring fencing of exporting companies in order to realise the forex that is needed for imports from the Southern African Power Pool (SAPP)’s Day Ahead Market (DAM), which requires prepayments.
Bongani Ndlovu