Zesa requires $72 million

HARARE - Cash-strapped Zesa Holdings (Zesa) says it requires $72,5 million from Treasury to increase power generation and produce about 2 000 megawatts required to meet the country’s requirements.

Zimbabwe needs 2 200MW at peak times but only generates around 1 400MW while importing a significant chunk from regional power utilities.

Ham Mungoshi, Zesa chief economist, yesterday told delegates at the Zimbabwe Energy Council pre-budget consultation seminar that the power utility was failing to meet the demand due to the unavailability of funds for the refurbishment of its power stations around the country.

Finance minister Tendai Biti is expected to deliver the 2013 National Budget mid next month with consultative meetings having begun across the country.

“For the rehabilitation of Hwange Power Station we require $50 million, Kariba South Power Station $10 million and $5 million and $7,5 million for  small power stations and transmission and distribution respectively,” he said.

Zimbabwe has faced critical power shortages since 2006, which have been blamed on ageing equipment and increased demand outstripping supply.

The country imports about 35 percent of its electricity needs from Mozambique, South Africa and other neighbouring countries.

Since the introduction of the Government of National Unity in 2009, Zimbabwe has put in place measures to ensure steady availability of power to critical sectors for the attainment of economic recovery and growth.

In 2010 government launched the Medium Term Plan that aims to restore and increase power generation and capacity to meet national demand for the attainment of full economic recovery and industrial growth.
Last month the ministry of Energy launched its National Energy Policy (Nep) last week, outlining the strategies and measures for increasing electricity capacity.

Zimbabwe has set a target of 10 000MW of installed capacity by 2040 to support a vision of growing the economy to  $100 billion.

The Nep called for a capacity expansion of 800MW at the Batoka Gorge hydropower power station by 2020, 300MW at the Kariba South hydroelectric power station by 2016, as well as other smaller hydropower plants.

However, lack of financial resources and adequate investments in the power sector has spawned frequent power cuts to industry, commerce and domestic users.

Mungoshi said the government should consider putting a five-year extension duty waiver on imported spares and materials.

“The current duty waiver is expiring next year and we need a five-year extension. The waiver must also cover heavy vehicles and trucks. Re-instatement of the waiver on Value Added Tax on spares and materials would also be welcome.”

The power utility is also calling for a waiver leeway on the government loans repayment period from the current two years to five years to assist its projects to take off.

“Our projects have long lead times and require about five years to be in a position to stand on their own and make profits. The government must also avoid downward adjustments of allocated funds as orders which have long been done on the basis of allocated funds,” said Mungoshi.

Zesa debt is estimated at $1 billion while it is owed about $450 million by consumers. - John Kachembere

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