Corporates struggle to pay Zesa bills

HARARE - Local companies which constitute half of Zesa Holdings (Zesa)’s $600 million debtors’ book are struggling to pay their power bills, group chief executive Josh Chifamba said.

He said the corporate world, which is struggling to secure capital and still recovering from a decade of hyperinflation and economic stagnation, owes the power utility $300 million in outstanding bill payments since the country adopted a multiple currency regime in 2009.

“We have $600 million on our debtors’ book and only 38 percent is owed by individuals, 12 percent is government and the rest corporates; that is mining companies, manufacturing companies and so on,” said Chifamba, adding his company had successfully launched a prepaid meter system to improve bill collections.

He said the huge debtors’ book affected future projects as the company seeks to increase generating capacity to a point of surplus by 2016.

Chifamba said Zimbabwe needed a stable policy environment to attract investment into electricity generation.

“It can take up to 15 years before a power plant turns to profitability,” he said.

The pricing model used at any given point, added the Zesa chief executive, is a major variable on the company’s ability to start new generation projects.

“For example before dollarisation people were paying an equivalent of $10 for 10 months when we import all our equipment and electricity from other countries like Mozambique in United States dollars.”

Currently, he said, Zimbabwe’s generation capacity leaves a shortfall of 750 megawatts (MW) which the country plans to reduce to 480MW and 445MW in 2013 and 2014 respectively after new projects are taken on board.

The country’s average power production is 1 400MW against a rising demand of around 2 200MW.

According to Zesa’s generation statistics the country generated 1 228MW yesterday morning; 740MW from Kariba Hydro Power Station (KHPS) out of installed capacity of 750MW, 431MW from Hwange Thermal Power Station (Hwange) out of installed capacity of 920, 15MW from Harare Power Station (HPS), 18MW from Munyati Power Station (MPS) and 24MW from Bulawayo Power Station (BPS).

HPS has 135MW installed capacity and an 80MW dependable capacity while MPS has installed capacity of 120MW.

BPS has an installed capacity of 120MW but is capable of generating 90MW.

By 2013 Zimbabwe plans to reduce its power deficit to 130MW before reaching a surplus position in 2016.

Projects that are on-going include the expansion of Hwange Thermal Power station’s unit seven and eight while Kariba Hydro Power station is also being expanded.

Zimbabwe and Zambia are working on a joint 1 650MW Batoka Gorge project which is set for completion in 2019 after Zimbabwe agreed to expunge its $71 million legacy debt with Zambia by end of March 2014.

Chifamba said government was also looking for a development partner for its 300MW Lupane Gas Power Station after methane gas discoveries in Lupane.

“Last week, we advertised for a developer in the papers,” he said, adding the gas reserves are still being verified.

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