Power deal bears fruit: Industry injects $5.5 monthly for electricty imports

power lines

Oliver Kazunga, Senior Business Reporter
THE country’s power utility, Zesa, says companies in the manufacturing sector are paying a total of $5,5 million per month for the importation of electricity.

Towards the end of last year, Zesa engaged companies in the manufacturing sector through their representative body, the Confederation of Zimbabwe Industries (CZI), to assist the utility meet its foreign debt payment obligations with a view to avoiding load shedding.

Zesa negotiated for the deal after realising that it was getting inadequate foreign currency allocations from the Reserve Bank of Zimbabwe, receiving $1,5 million weekly out of a demand of $5 million.

According to ZBCtv, the power utility’s chief executive officer Engineer Josh Chifamba reported their deal with industry had started bearing fruit with individuals companies paying close to $5,5 million a month for the power importation.

He, however, said despite local industry support, Zesa was still constrained in meeting the remaining $10 million required monthly.

CZI energy committee chairperson Mr Kurai Macheza told Business Chronicle that the arrangement was a company to company deal.

“I wouldn’t think that Eng Chifamba is lying to say that companies in the manufacturing sector are paying close to $5,5 million per month to Zesa for power imports. As CZI, we have sanctioned our individual members to enter into arrangements with Zesa. However, I wouldn’t know how much the companies are paying to Zesa because the power utility has engaged individual firms,” he told Business Chronicle.

The power utility imports power from South Africa and Mozambique to augment limited power generation within the country to ensure limited load-shedding though the suppliers are owed $55 million.

Zimbabwe’s power generation has been affected by drought in previous years, prompting the Zambezi River Authority to ration water supplies for power generation to the power utility, which is currently generating 285 megawatts from Kariba Power Station out of an installed capacity of 750MW. Of late, there have been challenges in mobilising adequate foreign currency to pay for power imports and ensure continued supply of electricity.

The payment terms according to ZETDC include an accrual of 10 percent interest on the prepayment.

The client, which is industry, would also be required to make a foreign currency prepayment to accounts as instructed by the power utility.

Zimbabwe has been importing about $6,6 million worth of electricity from South Africa’s power utility Eskom to bridge the electricity deficit.

The country owes about $10 million to Mozambique’s Hydro Cabora Bassa while the power utility is owed about $1 billion by domestic and industrial consumers.

@okazunga

Article Source: The Chronicle