ZESA Has No Money For Power Imports, Utility Owed ZiG5.7 Billion

Consumers owe ZESA Holdings more than ZiG5.7 billion when it is experiencing limited electricity generation due to low water levels at Kariba Dam, which supplies water to the 1 050 MW Kariba Hydropower plant, and ageing equipment at Hwange Thermal Power Station.

In a press release, ZESA Executive Chairman, Sydney Gata, revealed that the power utility has reduced imports from neighbouring countries due to its inability to service the arrears. He said:

Furthermore, to try and mitigate the demand and supply gap, we have to resort to imports from other regional utilities and ZETDC is actively involved in the Sapp Day Ahead Market to access any excess power from the region.

The imports have, however, been reduced as we do not have full capacity to service the arrears.

Gata also said ZESA is owed a staggering ZIG5.7 billion by various customers, including domestic households, industries, commercial entities and government departments.

Gata said as of August 12, 2024, the mining industry owed the power company ZIG684.8 million, or 12% of the total debt, while industrial users owed ZESA 50% of the debt, or ZiG2.8 billion.

The amount owed by domestic consumers is ZiG84.6 million (1%) while the amount owed by commercial debtors is ZiG656.99 million (12%).

This substantial debt has placed considerable strain on ZESA’s financial position, restricting its capacity to invest in infrastructure and cover operational costs.

In light of ongoing supply shortages, ZESA has been compelled to export electricity during non-peak hours to generate foreign currency.

These funds are essential for meeting critical obligations, including loan repayments, water bills, coal purchases, and infrastructure maintenance.

Gata urged customers to pay their electricity bills promptly, noting that ZESA has begun disconnecting those with outstanding arrears. He said:

We have embarked on a disconnection blitz to ensure that those who pay for electricity get the service due to them.

This will also see an enhanced installation of prepaid meters across the customer segments.

Gata said that following government approval of a cost-reflective tariff in December, cash flows have significantly improved, though they remain insufficient due to exchange rate losses.

The cash flow situation reveals a negative variance between cash received and cash obligations, indicating that the foreign currency generated is primarily used to meet critical commitments.

These include monthly loan obligations for the Hwange 7 and 8 expansion, averaging US$36 million and payable exclusively in US dollars, as well as Afreximbank loan obligations.

Other essential expenses encompass payments for water, coal, fuel, and critical spare parts for generation, transmission, and distribution. Additionally, funds are required for legacy loan instalments, operational vehicle replacements, national grid rehabilitation, and the refurbishment of distribution infrastructure.

More: Pindula News