ZESA recovers $55 million from debtors

By Staff reporter | 16 Jul 2019 at 10:02hrs
At least $55 million have been recovered so far from the $1.2 billion debt owed to the Zimbabwe Electricity Supply Authority (ZESA). Government is considering the opening of borders for renewable energy products as well as reviewing power tariffs to ease the power outages which have hit the country hard.
Of the total debt, local authorities owe a total of $359 million to the power utility, domestic and residential debt at $257 million and agriculture at $143 million. Industrial, mining and parastatals owe $94 million, $69 million and $43 million respectively. Commercial and lighting debt stood at $92 million while the government, according to Energy and Power Development Minister Fortune Chasi, has paid off its debt.

Chasi told the media on the sidelines of the state of the industry update breakfast meeting held in the capital that the power utility company is going to be aggressive to recover the debt.
"It's not much, like I said $55 million… its nothing really in the context of the debt," he said.
Zimbabwe requires about 1500 MW of electricity to meet daily demand but it is currently producing just a third of its 1 050 MW capacity, resulting in power cuts – lasting as long as 18 hours a day.
Quizzed, on the issue to remove duty and incentivizing the importation of renewable products, Chasi said, "We have already made representations to the treasury. I am reasonably confident that the suggestions that I have made to remove all the impediments to the importation of renewable energy equipment and material will succeed. However, we need more than that.  So we want a complete raft of measures that we can propose to Cabinet to enable investment in this sector." He added that, there is need to go the extra mile to encourage investment in solar by locals, individuals and external investors.
Updating on the meeting with South Africa's Eskom in which ZESA paid a partial payment of USD10 million, he said; "I am yet to engage South Africa at government level but it's a very urgent matter."

Mozambique and South Africa also cut electricity exports to the southern African nation over non-payment of debt estimated in the region of USD80 million.
AfDB, in its Zimbabwe Infrastructure Report 2019, noted that the provision of low cost power to Zimbabweans at heavily subsidized rates has had serious consequences for the financial position of the utility. This is given as the government does not compensate the utility for these subsidized prices. Currently the country's is at 2 US cents per kWh.
"It's a very urgent matter like I indicated, we had internal meetings - arranging stakeholder consultation around it as we want to understand the impact. We don't want to just throw figures, we say this is a new rate, we must be methodical in what we are doing and process is the key. So once we have clarity on industry position we factor it in and discuss it and of course it must go through the usual governmental processes for approval. But what I can assure is that it is actually extremely diligent that we deal with that," Chasi said.
He noted the country's power utility company has a legal obligation to mitigate its own losses.
"It cannot go on even if it wants to give power to everyone every minute, if it is not being paid it will crumble, so switching off is an option. It's not my preference I want and would plead with every consumer to pay their bill," he said.
Total financing required for rehabilitation, extension and upgrade of the generation, distribution and transmission network is estimated to cost nearly USD1.2 billion, according to AfDB.
Meanwhile, during the breakfast meeting, stakeholders suggested the government should declare the electricity situation a "natural disaster".



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