Zim to continue with NamPower deal

HARARE - Energy minister Elton Mangoma says Zimbabwe will continue supplying NamPower with electricity until the country clears its $40 million debt with the Namibian utility company.

This comes amid reports that NamPower has extended its power supply deal with Zimbabwe for another year, to November 2014, because Zesa Holdings (Zesa) had partially failed to honour the initial agreement.
In February 2007, NamPower and Zesa signed an agreement in which the Namibian utility would give its Zimbabwean counterpart $40 million to refurbish its Hwange Thermal Power Station.

The agreements were approved by the two governments and the two heads of state witnessed the signing between Zesa and NamPower.

Given Zimbabwe’s then hyperinflationary environment and lack of foreign currency, Zesa was to repay the debt by exporting 150 megawatts (MW) of power to Namibia daily for five years.

“This wasn’t happening and we have not yet fully paid off the $40 million,” Mangoma said, adding Zesa remained committed to honouring its end of the arrangement.

“The power that we agreed on we will continue giving them because we are just paying off that credit as agreed before and nothing more,” added the Energy minister.

“What we do is we give them 100MW and more during off peak because electricity is not like water; you have to utilise what you are generating,” he said.

NamPower chief executive Paulinus Shilamba was quoted by Namibian media as saying Zesa still owes his company between $15 million and $20 million. Mangoma said the outstanding amount tallies with NamPower’s claims.

Currently, Zesa is sending the electricity via Botswana to South Africa before it reaches Namibia.
Shilamba said Zesa has been unable to meet its power export obligations due to recurrent transmission breakdowns.

“Nobody could be blamed for that. This has resulted in Zesa still owing us power for another year and therefore the contract was extended until November 2014 after which we again have to renegotiate for a new agreement,” he said.

Zimbabweans had hoped for improved power supply once Zimbabwe finishes exporting power to Namibia and honour its agreement this year.

Currently, the country is facing acute power shortages, with Zesa saying production averages 1 400MW against rising demand of 2 200MW.

To plug the power shortages, government is in negotiations with Zambia for the construction of a joint 1 600MW Batoka Gorge hydro-electric power project.

Mangoma last week said the two nations are scheduled to put together expressions of interest as they seek to develop and finalise terms of the joint venture.

“We want by the time we get to December, be very clear in which direction we are going and on this we are going on a build, operate and transfer basis,” said Mangoma.

“We are making the strides that are necessary there,” he added.

This follows Zesa’s chief executive Josh Chifamba’s recent remarks that the two countries had agreed to commence work on the Batoka Gorge hydro-electric 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.

Mangoma said the country had firm plans to increase power generation capacity to 20 000 megawatts in order to achieve the dream of a $100 billion economy by 2040.


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