Zim Power Company records $25m profit

Source: Zim Power Company records $25m profit – DailyNews Live

BUSINESS WRITER      17 August 2017

HARARE – National power utility Zesa Holdings subsidiary – Zimbabwe Power

Company – has become one of the few government entities to record a


The State-owned company’s managing director Noah Gwariro said ZPC has

recorded a $25,3 million profit after tax for the year ended December 31,


“This was attributed to a decrease in the allowance for credit losses of

$22,95 million,” he said in a market update.

Gwariro, however, noted that the power generation firm will need to

improve on its revenue collections to better manage its cash-flow

constraints and financial obligations.

“We will also improve on operational efficiencies in order to cut costs

and improve the bottom line. ZPC has been identified by the government as

one of the 10 strategic parastatals earmarked for an emergency reform

programme. In this regard, ZPC realises the importance of adequate and

reliable power supply to support the economic turnaround envisaged by

government,” he added.

In the six months to June, ZPC sent out a total of 1 789,80 gigawatt hours

(GWh) of energy against a target of 1 902,76GWh.

Gwariro said production target for the period was missed by 5,94 percent

due to inadequate coal supplies at ZPC’s small thermal power stations,

water conservation measures at Lake Kariba, as well as numerous boiler

tube leaks and outages at Hwange Power Station.

“Coal suppliers failed to meet their delivery targets for the quarter due

to various challenges being faced by the coal miners, chief amongst them

being delayed recapitalisation on the key mining equipment and cash

flows,” he said.

This challenge is preventing most of the miners from processing adequate

coal required to meet their delivery targets to the stations, he added.

The ZPC boss further indicated that Makomo Small Thermals account was

settled and prepayment for fresh supplies was made, resulting in the

resumption of supplies from Makomo on June 15, 2017.

He also noted that Kariba’s water level rose from 481,01 metres at the end

of the first quarter to 483,19 metres at the end of June 2017,

representing a 2,18 metres rise over the quarter. The lake is currently

56,20 percent full.

The lake level at the same time last year was 480,31 million, representing

a 0,60 percent difference.

Gwariro said the Kariba South Extension project is now at 91 percent to

completion and on course to commissioning in December 2017.

“The Hwange 7 and 8 project is progressing well. The project parties – ZPC

and Sinohydro Corporation Limited – are finalising the conditions

precedent of the main funding loan of $998 million from the Export Import

Bank of China,” he said.

“ZPC has cleared most of its conditions precedent. Meanwhile, Sinohydro

have initially subscribed for their 36 percent shareholding in the project

company, Hwange Electricity Supply Company Private Limited. To date,

parties are now preparing to inject their respective bulk equity

contributions into the project company.

Sinohydro and ZPC technical teams are on the ground in Hwange to finalise

the project designs and project site plans,” he added.