ZESA owes US$100m for imports

Documents in the possession of this newspaper show that the Zimbabwe Electricity Supply Authority (ZESA) was sitting on US$97.7 million arrears for power imported from Mozambique, Zambia and the Democratic Republic of Congo.

The country has not been able to pay for its regional power imports amounting to US$97.7 million as at 27 November 2009, one of the documents said.

There are moves to boost internal generation capacity to reduce dependency on regional suppliers, with more than US$385 million needed for an emergency plant rehabilitation programme.

So far only US$51 million has been raised from the African Development Bank (AfDB) for the exercise while the government scrounges around for more funding.

The AfDB loan would only be available in the second quarter of 2010 because of bureaucratic and political considerations by the lender, which would militate against efforts to improving electricity generation in the short-term.

The government is also said to have reached an agreement with Botswana Power Corporation under which the company would inject US$8 million to revive the mothballed Bulawayo thermal power station, which has not produced electricity for nearly a decade.

The deal is similar to one agreed last year with Namibia’s utility NamPower, which allowed the Windhoek-based company to invest US$45 million to rehabilitate Hwange in exchange for electricity.

The emergency rehabilitation plan would see Zimbabwe’s Hwange power station ramping up generation to maximum capacity of 750 MW while the 90MW Bulawayo thermal power plant will be restarted with help from Botswana by June next year.

Hwange, like Kariba hydro power station, has been dogged by ageing equipment and lack of funding to buy spares to revamp its units.

Any increase in power output is good news for Zimbabwe, which has suffered acute power cuts due to falling generation capacity over the years and has had to rely from ever declining imports from its regional neighbours.

Internal generation capacity from the main Kariba and Hwange power stations as well as smaller thermal stations is around 900 megawatts (MW) against demand of around 2 270 MW during peak hours.

This leaves a huge shortfall of more than 1 300 MW during peak periods which the country has to meet through imports.

Zimbabwe has over the years failed to attract independent power producers despite having several power projects on the cards, which if implemented would make the country a net exporter of electricity.

An unstable political environment and lack of policies that encourage private sector investment in the sector has kept potential investors away.

A unity coalition formed in February between rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai that had raised investors’ hopes may yet collapse amid sharp difference over how to share executive power.

Zimbabwe requires US$2 billion for new equipment and to expand production at the country’s two main power plants and ease shortages that have also affected industrial production and contributed to the economic crisis.

Critics blame the economic crisis on repression and wrong policies by Mugabe such as his seizure of productive farms from whites for redistribution to landless blacks.

Failure by the government to provide resources and skills training for black villagers resettled on white farms saw agricultural production plummeting by about 30 percent, causing food shortages and also crippling an economy built on farming.

Mugabe, in power since Zimbabwes 1980 independence from Britain, however denies mismanaging the economy and blames his countrys problems on Western sanctions.