Zesa owes HCB Mozam­bique $10m Util­ity se­cures $81m loan fa­cil­ity

Chronicle (Zimbabwe) - - Business Chronicle - Felex Share Harare Bureau Harare Bureau

ZESA owes Mozam­bique’s Hy­dro Ca­hora Bassa (HCB) $10 mil­lion, rais­ing fears among stake­hold­ers that the fig­ure could bal­loon to un­prece­dented lev­els wit­nessed four years ago if it is not cleared on time.

In 2012, the power util­ity strug­gled to clear the $76 mil­lion it owed the Mozam­bi­can power util­ity. Zesa im­ports 50 megawatts from Mozam­bique.

Zesa spokesper­son Mr Fullard Gwasira said they were work­ing on modal­i­ties to clear the debts even though ear­lier re­ports had in­di­cated that the im­ports are pre-paid.

“The Zim­babwe Elec­tric­ity Trans­mis­sion and Dis­tri­bu­tion Com­pany (ZETDC) has a li­a­bil­ity to­wards Hy­dro Ca­hora Bassa (HCB) of Mozam­bique of about $10 mil­lion in power im­ports,” he said.

“The credit con­trol mea­sures cur­rently be­ing im­ple­mented by the util­ity as a re­sult of the ab­sence of a 2016 tar­iff ZESA Hold­ings has se­cured $81 mil­lion from a lo­cal fi­nan­cial in­sti­tu­tion for the pro­cure­ment of spares for power sta­tions and sta­bil­i­sa­tion of the na­tional grid, sources have said.

“The deal was signed last week and Zesa can start draw­ing down on the fa­cil­ity,” said one source who re­quested not to be named. ‘‘It’s a loan fa­cil­ity ar­ranged by a lo­cal bank.”

No of­fi­cial com­ment could be ob­tained from Zesa by the time of go­ing to print.

Zesa, through its sub­sidiary, the Zim­babwe Power Com­pany op­er­ates five power sta­tions. The power util­ity has been work­ing on pro­jects aimed at ex­pand­ing elec­tric­ity gen­er­a­tion to bridge the gap be­tween

ad­just­ment, and pri­or­ity sup­port from the cen­tral bank will en­sure that the debt is amor­tised quickly due to the strate­gic na­ture elec­tric­ity has to na­tional se­cu­rity. The ZETDC also has a good credit rat­ing with all its ex­ter­nal sup­pli­ers of power and is a prime cus­tomer due to the avail­abil­ity of hard cur­rency in the form of the US dol­lar, while it also en­gages sup­pli­ers con­sis­tently to en­sure that se­cu­rity of elec­tric­ity sup­ply is main­tained.” Zim­babwe En­ergy Reg­u­la­tory Au­thor­ity (ZERA) re­cently shot down a pro­posal by Zesa to in­crease elec­tric­ity costs by 49 per­cent, declar­ing that the av­er­age power tar­iff should sup­ply and de­mand. These in­clude ex­pan­sion of Kariba, Hwange Ther­mal Power Sta­tion and re­ha­bil­i­ta­tion of small ther­mal sta­tions.

Zesa is also work­ing on up­grad­ing the na­tional trans­mis­sion sys­tem as a lot of ca­bles are now old.

In April, Zesa com­pleted the re­fur­bish­ment of its power evac­u­a­tion sys­tem at Kariba Power Sta­tion at a cost of about $14 mil­lion. Zesa Hold­ings, through its trans­mis­sion sub­sidiary ZETDC con­tracted Hel­craw, a lo­cal firm, to un­der­take the project.

The project, funded by Afrochin, in­volved re­place­ment of old ca­bles and the as­so­ci­ated equip­ment to in­crease off-take of elec­tric­ity from the power sta­tion and to make the as­set in­sur­able as well as to elim­i­nate the risk of fire to the equip­ment. Zesa Hold­ings in­tends to build a

re­main pegged at 9,86 cents per kilo­watt per hour this year. The power util­ity had pro­posed that the av­er­age tar­iff be 14,69 c/kWh.

Mr Gwasira said the coun­try had not ex­pe­ri­enced load shed­ding in the past nine months.

“All the power out­ages that are be­ing ex­pe­ri­enced by some con­sumers are a re­sult of theft and van­dal­ism to trans­form­ers and equip­ment fail­ure due to age and ob­so­les­cence,” he said.

“Elec­tric­ity net­works are some­times de­lib­er­ately switched off as a re­sult of planned main­te­nance, of which cus­tomers are no­ti­fied of this in the me­dia be­fore­hand. Some­times the net­work is also switched off to en­able staff to re­pair sud­den faults but there hasn’t been any load shed­ding. In some cases, ZETDC new elec­tric­ity dis­tri­bu­tion line link­ing Mutare and Tri­an­gle at a cost of about $150 mil­lion and has al­ready in­vited bids from com­pa­nies in­ter­ested to un­der­take the project.

To be known as Or­ange Groove-Tri­an­gle, the ten­der for the 300 kilo­me­tre 400kV line will en­hance re­li­a­bil­ity and ef­fi­ciency of the elec­tric­ity trans­mis­sion sys­tem. Zesa will also spend $14 mil­lion to up­grade Alaska-Karoi line.

Zesa, which is owed about $1,1 bil­lion by con­sumers has been strug­gling to raise funds for cap­i­tal pro­jects. The power util­ity has since in­creased re­cov­ery rate to 50 per­cent from 40 per­cent of elec­tric­ity pur­chases on con­sumers with pre-paid me­tres. This means Zesa will take 50 per­cent of ev­ery pur­chase to off­set debts ac­cu­mu­lated un­der the old con­ven­tional billing sys­tem.

had been ex­pe­ri­enc­ing an up­surge in cases of theft and van­dal­ism wherein trans­form­ers had been the prime tar­get with per­pe­tra­tors drain­ing oil or com­pletely dam­ag­ing them, with af­fected cus­tomers hav­ing to go for pro­longed pe­ri­ods with­out elec­tric­ity. ZETDC ap­peals to the af­fected con­sumers to bear with us while re­place­ment works of the dam­aged equip­ment are be­ing car­ried out.”

Mr Gwasira said the Dema emer­gency power plant was now con­tribut­ing 100MW to the na­tional grid, a de­vel­op­ment that had sta­bilised the power sup­ply sit­u­a­tion.

On so­lar pro­jects that are ex­pected to bring in an ad­di­tional 300MW, Mr Gwasira said: “The Zim­babwe Power Com­pany (ZPC) is mak­ing con­sid­er­able progress to en­sure that the so­lar pro­jects come to fruition as planned.’’

Mr Fullard Gwasira

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