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