Zesa Holdings has paid South African power utility Eskom US $12 million to avoid disconnection. It will pay another US$20 million this month as it battles to clear its arrears. The power utility also presented a payment plan of US$5 million a week beginning next month. This is to settle the US$44 million it owes Eskom.
However the debt will take about five months to clear. This is because US $12 million will go towards servicing current supplies monthly. Eskom has repeatedly threatened to disconnect Zimbabwe.
Josh Chifamba the Zesa chief executive Engineer was quiet on the latest arrangement. According to him everything is under control, and that Zesa, the government and the Central Bank are working on the issue.
However a Reserve Bank of Zimbabwe (RBZ) official disclosed that the power utility paid US $12 million last week despite the foreign currency shortages. The official said that the money was paid on Tuesday and they presented a payment plan which will see another US $10 million being paid mid this month. That is before paying another US $10 million at the end of this month.
Zesa is importing 50MW from Hydro Cahora Bassa (HCB) of Mozambique and another 300MW from Eskom. Apparently the local power utility has on several occasions breached terms of payment plans agreed with Eskom. According to Dr John Mangudya the RBZ Governor, Zesa should catch up so that it can continue to enjoy electricity supplies.
The country has been relying on power imports from South Africa and HCB of Mozambique. This is in order to meet the local demand as a way of promoting production in the economy. Zesa is working on expansion projects in Kariba and Hwange while also refurbishing its power stations.
- Links: Construction Review
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