Eskom seeks power im­port guar­an­tee

Chronicle (Zimbabwe) - - Business - Harare Bu­reau

SOUTH Africa’s power util­ity Eskom is said to be seek­ing a Gov­ern­ment guar­an­tee of R500 mil­lion to back elec­tric­ity im­ports by Zim­babwe.

Well placed sources told The Her­ald Busi­ness that the re­quest for a guar­an­tee fol­lows fail­ure by the lo­cal power util­ity to pay for im­ports from South Africa, and this could see Zesa start to ra­tion elec­tric­ity sup­plies.

Zesa is fac­ing cash flow chal­lenges mainly as a re­sult of a huge debtors book, cur­rently at $1,1 bil­lion. This has also been wors­ened by the un­avail­abil­ity of the 2016 tar­iff up­ward ad­just­ment.

Zesa has since in­creased re­cov­ery rate to 50 per­cent from 40 per­cent of elec­tric­ity pur­chases on con­sumers with pre-paid me­ters. This means Zesa will take 50 per­cent of ev­ery pur­chase to off­set debts ac­cu­mu­lated un­der the old con­ven­tional billing sys­tem.

“They (Eskom) are still will­ing to do busi­ness with Zesa but they have re­quested for a Gov­ern­ment guar­an­tee and we are look­ing at the is­sue,” a source in the Min­istry of Fi­nance and Eco­nomic De­vel­op­ment said.

It could how­ever, not be as­cer­tained how much Zesa owes Eskom, but an­other source said the amount could be in the “re­gion of $12 mil­lion.”

No of­fi­cial com­ment could be ob­tained from Zesa and the min­istry by the time of go­ing to print. Zesa im­ports up to 350 megawatts of power from South Africa and Mozam­bique.

Since the be­gin­ning of the year, Zim­babwe’s power sit­u­a­tion has sig­nif­i­cantly im­proved due to a num­ber of ini­tia­tives put in place by Zesa Hold­ings, in­clud­ing im­ports. But some an­a­lysts have warned that this is not sus­tain­able at the cur­rent elec­tric­ity tar­iff.

The power cuts had been so se­vere with many res­i­dents suf­fer­ing up to 18-hour black­outs. The rolling cuts also af­fected busi­nesses, par­tic­u­larly min­ing com­pa­nies and the man­u­fac­tur­ing in­dus­try.

“The chal­lenge is Eskom may end up cut­ting sup­plies if the Gov­ern­ment fails to raise the guar­an­tee,” said Fredrick Chinwa, an eco­nomic an­a­lyst with a lo­cal re­search firm.

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