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
profit.
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,
2016.
“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.
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