Govt bails out Zesa

Chronicle (Zimbabwe) - - National News - Felex Share Harare Bureau

THE Gov­ern­ment has averted a po­ten­tial elec­tric­ity cri­sis by is­su­ing a R500 mil­lion ($35 mil­lion) guar­an­tee to South Africa’s power util­ity, Eskom to back up power im­ports from the neigh­bour­ing coun­try.

Eskom, which sup­plies Zesa Hold­ings with 300 megawatts, re­cently wrote to the power util­ity threat­en­ing to cut sup­plies over a $12 mil­lion debt.

Er­ratic power sup­plies have a neg­a­tive im­pact on in­dus­try and the agri­cul­ture sec­tor.

Fol­low­ing pro­vi­sion of the guar­an­tee, the onus is now on Zesa to en­sure it meets its obli­ga­tions on time.

Sources yes­ter­day said the guar­an­tee to Eskom was is­sued last week.

“A loom­ing dis­as­ter has been averted, but that does not mean Zesa has to re­lax be­cause still the debt has to cleared,” said a source.

“In the event that Zesa fails to pay, Eskom will sim­ply call up the guar­an­tee and Gov­ern­ment will have to pay the money. This is a bur­den if Zesa does not pay up. Be­cause in the na­tional bud­get, that guar­an­tee is not fac­tored in, it means some­thing bud­geted for will have to suf­fer. Legally, Gov­ern­ment is say­ing I am stand­ing be­hind Zesa.”

The source said Zesa man­age­ment must be rig­or­ous and in­no­va­tive to re­coup $1,1 bil­lion owed by cus­tomers.

This, said the source, was the only way the power util­ity could ser­vice its debts.

“The guar­an­tee will only be used as a last re­course in the event that Zesa fails to set­tle its bills,” he said. ‘‘What Zesa needs to do is to en­sure it set­tles its bills and for that to hap­pen it needs the sup­port of ev­ery­body in­clud­ing the Re­serve Bank of Zim­babwe. Cus­tomers also have to re­spond pos­i­tively as it is also in their in­ter­est.”

Zesa also owes Mozam­bique’s Hy­dro Ca­hora Bassa $10 mil­lion.

Zesa chief ex­ec­u­tive En­gi­neer Josh Chi­famba yes­ter­day de­clined to com­ment on the guar­an­tee, re­fer­ring ques­tions to the Min­istry of En­ergy and Power Devel­op­ment.

He, how­ever, said the power util­ity was putting in place mea­sures “to avoid load shed­ding at all costs”.

“We are work­ing hard to en­sure there won’t be any load shed­ding. We are go­ing to be talk­ing this com­ing week with our cus­tomers who are into ex­ports with a view to see if they can give us part of their al­lo­ca­tion such that we have for­eign cur­rency and are able to pay for power im­ports,” Eng Chi­famba said.

“Load shed­ding is some­thing we should avoid at all costs. It has a neg­a­tive im­pact not only on our op­er­a­tions but also on the ac­tual func­tion­ing of the econ­omy.

“In times like this, cus­tomers earn­ing forex should come and as­sist. In the process of help­ing us, they will be help­ing them­selves be­cause with­out re­li­able and se­cure (power) sup­ply their busi­ness will be un­der­mined.”

He added: “Pre­vi­ously we have had this kind of dis­pen­sa­tion with cus­tomers and it’s the same model we are try­ing to repli­cate. We have been suc­cess­ful with plat­inum cus­tomers and we are also mak­ing a plea to oth­ers to come on board. If we lose these sup­plies the ef­fects are calami­tous. What is a power cri­sis might turn out to be a se­ri­ous fi­nan­cial cri­sis.”

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.

Dur­ing the last quar­ter of last year, the power cuts had been so se­vere that many res­i­dents ex­pe­ri­enced up to 18-hour out­ages.

The power cuts also af­fected busi­nesses, par­tic­u­larly min­ing com­pa­nies and the man­u­fac­tur­ing sec­tor.

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