July 23, 2019

ZESA, Eskom talks continue

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Garikai Fadzi

South Africa’s energy entity Eskom says discussions with ZESA are continuing, as it seeks to find a solution to the outstanding debt owed to it by Zimbabwe’s power utility, unlocking power supplies into the southern African country.

ZESA owes Eskom and Mozambique’s Hidroelectrica de Cahora (HCB) of Mozambique a total of US$74 million and has not been able to service its debt due to acute foreign currency shortages affecting Zimbabwe.

The power utility’s failure to honour its obligations has resulted in power cuts which have crippled industry and severely affected business.

In turn, ZESA is owed over $1 billion locally, with the bulk previously being in US dollars.

Industry owes $350 million with the balance largely being owed by government departments and farmers. Recently, ZESA extended US$10 million to Eskom towards its debt repayment with negotiations for
more power being initiated.

However, Eskom, in emailed responses to ZTN said discussions are on-going.

“Discussions continue with the Zimbabwe Electricity Supply Authority (ZESA) to find a mutually beneficial solution to the outstanding debt. Eskom is a commercial operation and will be guided by the contracts we have in place with ZESA,” read part of the response.

This comes as Zimbabwe is experiencing power shortages with some areas, including industry, going for as long as eighteen hours daily without power which has increased calls for the adoption of alternative energy sources such as solar.

Zesa reduced electricity generation at the Kariba hydro plant to almost a third of its capacity due to low water levels at the dam.

The power cuts are threatening the viability of the mining industry with platinum and gold producers the hardest hit.

Zimbabwe has over the years struggled to produce enough electricity to meet demand and has resorted to importing power from countries such as the Democratic Republic of Congo, Mozambique and South Africa.

Zimbabwe is currently generating an average of 800MW, against a national demand of 1 600MW.

In order to fix the recurring problem in the long term, Zimbabwe and its northern neighbour, Zambia, recently awarded US based General Electric and China’s Power Construction Corporation the tender to construct the Batoka Gorge Hydro Electric Scheme which is expected to produce 2400MW of electricity which will be equally shared between Zimbabwe and Zambia.

The project is being carried out under a “Build Operate and Transfer” form of project financing.

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