Zimbabwe’s government says it has struck a deal to pay R213.3m to Eskom to receive 400MW of power from SA’s power utility.
Eskom and Zimbabwe’s government had been locked in talks for weeks to strike a power deal, as Zimbabwe is currently experiencing a severe power shortage with load shedding of up to 18 hours a day.
The power crisis has forced some Zimbabwean companies to shut down, further worsening the country’s economic crisis.
Zimbabwe’s energy minister, Fortune Chasi, has been in SA to plead for urgent power supplies from Eskom.
Addressing journalists after a cabinet meeting, acting energy minister Sekai Nzenza said Eskom had come to Zimbabwe’s rescue.
“On the measures to plug power outages, I can report that the Zimbabwe Electricity and Tariff Distribution Company (ZETDC) has engaged a local bank to the tune of a $15m guarantee to unlock supply of 400MW of power from Eskom.”
Zimbabwe currently owes about R327m to Eskom. It recently paid R140.2m to service its total debt after action was taken to cut the supply.
However, Zimbabwe has a bad record of servicing its debt, and its government was forced to provide a bank guarantee to Eskom for the deal to be done.
Nzenza said: “At the same time, the ZETDC and the RBZ have also agreed with Eskom on a payment plan. These initiatives that have been put in place will enable us to have more power.”
She also revealed that Zimbabwe’s overall power shortfall stands at 582MW, adding that mining companies can pay for electricity in foreign currency to guarantee supplies.
Electricity is critical for Zimbabwe’s mining sector, the nation’s biggest foreign currency earner.
Zimbabwe has previously imported up to 450MW from Eskom, but the SA power utility stopped the arrangement after Harare defaulted on its payments.
Earlier in July, President Cyril Ramaphosa agreed to assist Zimbabwe to solve its power challenges after meeting his counterpart, Emmerson Mnangagwa, on the sidelines of the African Continental Free Trade Area summit in Niger. After the meeting Ramaphosa told journalists he was willing to assist Zimbabwe but would engage Eskom.