ZESA owed 1 US$ billion

Ministers Patrick Chinamasa and Samuel Undenge.

Ministers Patrick Chinamasa and Samuel Undenge.

ZESA Holdings’ consumer debt has increased to over US$1 billion as firms and individuals continue to default on payments, a move which poses a risk to power supply security.
The power utility’s commercial director, Ralph Katsande, told the Financial Gazette on Tuesday that the unpaid bills were hampering ZESA’s operations and viability.
Debt from domestic consumers accounted for 29 percent of the total debt, while industry, local authorities and the commercial sector owed, 20 percent, 21 percent and 11 percent respectively.
The farming and mining sectors owed ZESA eight percent and six percent, respectively.
Government, parastatals and others’ debt constituted about five percent of the debt.
The development makes it difficult for the power utility to sustain its network maintenance and to service its debts, a situation that has led to key creditors threatening to withdraw their services, Katsande disclosed.
“Debt is a serious challenge,” said Katsande. “Our debtors’ book has gone up to over a billion (dollars) now.”
Failure to collect has also resulted in most suppliers demanding upfront payment for goods and services, making it difficult for ZESA to invest in new capital projects in the wake of frequent breakdowns of its ageing electricity generating plants.
The power utility operates five power stations in Kariba, Hwange, Munyati, Harare and Bulawayo.
The country’s failure to invest in new and major electricity supply projects has also contributed to power shortages.


Zimbabwe currently generates about 1 000 megawatts (MW) against a national demand, at peak periods, estimated to be about 2 200MW.

ZESA is under extreme pressure to raise more than US$500 000 to meet its commitments on Kariba and Hwange power stations, which are undergoing expansion.
Apart from its commitment towards the two mega projects, the power utility is also at risk of failing to service a US$320 million loan availed by China’s Exim Bank to support the expansion of Kariba South Hydro Power Station, if the consumers continue to duck and dive on payment.
The project entails the construction of an additional two units which are expected to add 300 megawatts of power to the national grid.
Zimbabwe currently generates about 1 000 megawatts (MW) against a national demand, at peak periods, estimated to be about 2 200MW.
The country has been importing electricity from regional power utilities to cover the shortfall, but this also has not been enough to meet demand.
ZESA has, however, signed a number of deals to improve its generation capacity.
Apart from the Kariba South Hydro Power Station expansion project, which is currently underway, the proposed expansion of Hwange Thermal Power Station unit 7 and 8 will add 600MW to the national grid.
The project will take 42 months to complete from date of financial closure, which is expected to be concluded in November this year.
Electricity is expected to be one of the key drivers of government’s Zimbabwe Agenda for Sustainable Socio-Economic Transformation economic blueprint, which envisages increased access to electricity by domestic consumers, both within urban set ups and rural communities.
The electricity situation has serious repercussions on the recovery of the economy’s productive sectors of manufacturing, agriculture, mining and tourism, which government wants to drive economic recovery.
Presently, most households and industries in Zimbabwe are subjected to longer hours of load-shedding daily.