Zesa engages Eskom over debt - Zimbabwe Situation

Zesa engages Eskom over debt

Source: Zesa engages Eskom over debt | The Herald June 3, 2019

Zesa engages Eskom over debt
Eng Chivaura

Golden Sibanda recently in Victoria Falls
Power utility Zesa Holdings will this week head to South Africa for crunch talks with fellow electricity supplier, Eskom, over a payment plan relating to a US$33 million debt for power imports.

This comes as Zimbabwe is facing debilitating power shortages, which have prompted crippling cuts, due to reduced generation at Kariba Dam on concerns over fast receding lake water levels.

Reports say power generation water level had plummeted to 29 percent as of late last week.

Kariba, which is designed to operate at a maximum water level of 485 metres, is only left with about 5 metres of usable water, below which the power station would need to shut down all generators.

It will have to wait for water to build up before the green light is given to resume power generation.

With Zimbabwe’s largest power station only able to generate at a maximum 358 megawatts instead of rated capacity of 1 050MW, demand for power outstrips supply by as much as 600MW.

Zimbabwe, which has faced power shortages since 2007, relied on imports over the last five years to avert power cuts, imported up to 350MW from Eskom and about 50MW from HCB of Mozambique.

The State power utility could not, however, keep up with payment terms under a R500 million supply deal, resulting in arrears to South Africa’s state utility at one point surpassing US$150 million.

Zesa acting chief executive Engineer Patrick Chivaura, told a Chamber of Mines conference in Victoria Falls last week that the power utility needed to thrash out a payment plan with Eskom to get the imports.

“We have not been able to pay for our imports since October last year. There was curtailment of power by Eskom from 450MW to 50MW. HCB of Mozambique did the same. We are only getting 50MW as we speak.

“It will cost us $20 million a month to import 600MW, it will cost us $17 million to import 500MW. We do have a payment plan which the RBZ is supporting but it is nowhere near what Eskom is expecting from us. Next week we are trooping to meet Eskom for a payment plan,” Engineer Chivaura told delegates.

The Zesa acting CEO said Zimbabwe had a deficit of between 300MW and 600MW, which has spawned load shedding. The power situation in the country comes as Zimbabwe’s second biggest power plant, Hwange Power Station, is facing challenges due to antiquated equipment and foreign currency limitations.

As such, instead of its usually dependable capacity of 700MW, Hwange can now manage a maximum of 500MW at best. In fact, Hwange in its prime generated 920MW, but is now constrained by old age and forex shortage.

“We have designed a load shedding plan that will save industries. We are sacrificing domestic consumers. We need to import power when we need it from our regional neighbours. But do they have it? Yes they have.

“Eskom can give us 400MW that they don’t need at night. We have no choice, we have to import. We owe $33 million to Eskom and $35 million to HCB,” Eng Chivaura said, adding the total debt for power imports was US$80 million.

Plans are also afoot for Zimbabwe to strike a deal with Mozambique, which is facing overflow challenges and can raise output at HCB due to floods occasioned by recent tropical cyclones, for power imports.

Zimbabwe could further cut power generation at Kariba Dam if the lake’s water levels do not improve, Energy and Power Development Minister Fortune Chasi who is due to review the situation, said recently.

This comes after the Zambezi River Authority, which administers the affairs of riparian river shared by Zimbabwe and Zambia, cut water for power generation a Kariba Dam as precaution to avoid depleting the lake.

Kariba Dam did not receive enough water inflows due to drought in the Zambezi River’s catchment areas.

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