Zim Power Company records $25m profit

HARARE - National power utility Zesa Holdings subsidiary — Zimbabwe Power Company — has become one of the few government entities to record a profit.

The State-owned company’s managing director Noah Gwariro said ZPC has recorded a $25,3 million profit after tax for the year ended December 31, 2016.

“This was attributed to a decrease in the allowance for credit losses of $22,95 million,” he said in a market update.

Gwariro, however, noted that the power generation firm will need to improve on its revenue collections to better manage its cash-flow constraints and financial obligations.

“We will also improve on operational efficiencies in order to cut costs and improve the bottom line. ZPC has been identified by the government as one of the 10 strategic parastatals earmarked for an emergency reform programme. In this regard, ZPC realises the importance of adequate and reliable power supply to support the economic turnaround envisaged by government,” he added.

In the six months to June, ZPC sent out a total of 1 789,80 gigawatt hours (GWh) of energy against a target of 1 902,76GWh.

Gwariro said production target for the period was missed by 5,94 percent due to inadequate coal supplies at ZPC’s small thermal power stations, water conservation measures at Lake Kariba, as well as numerous boiler tube leaks and outages at Hwange Power Station.

“Coal suppliers failed to meet their delivery targets for the quarter due to various challenges being faced by the coal miners, chief amongst them being delayed recapitalisation on the key mining equipment and cash flows,” he said.

This challenge is preventing most of the miners from processing adequate coal required to meet their delivery targets to the stations, he added.

The ZPC boss further indicated that Makomo Small Thermals account was settled and prepayment for fresh supplies was made, resulting in the resumption of supplies from Makomo on June 15, 2017.

He also noted that Kariba’s water level rose from 481,01 metres at the end of the first quarter to 483,19 metres at the end of June 2017, representing a 2,18 metres rise over the quarter. The lake is currently 56,20 percent full.

The lake level at the same time last year was 480,31 million, representing a 0,60 percent difference.

Gwariro said the Kariba South Extension project is now at 91 percent to completion and on course to commissioning in December 2017.

“The Hwange 7 and 8 project is progressing well. The project parties — ZPC and Sinohydro Corporation Limited — are finalising the conditions precedent of the main funding loan of $998 million from the Export Import Bank of China,” he said.

“ZPC has cleared most of its conditions precedent. Meanwhile, Sinohydro have initially subscribed for their 36 percent shareholding in the project company, Hwange Electricity Supply Company Private Limited. To date, parties are now preparing to inject their respective bulk equity contributions into the project company.

Sinohydro and ZPC technical teams are on the ground in Hwange to finalise the project designs and project site plans,” he added.

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