ZESA Holdings has not received its budgetary allocations as stated in the blue book since 2013, the company has said.
In a statement presented before the Parliamentary Portfolio Committee on Mines and Energy for the 2015 post budget analysis recently, the power utility said lack of disbursement of budgetary support from Treasury had forced the company to rely on loans to fund its projects.
The power utility said it was now being forced to borrow $73 million to fund capital projects at different power stations in Hwange, Kariba, Harare, Mutare and Gairezi as well as upgrading its plant and machinery.
“A total of $1,047 billion will be required for power infrastructure projects in 2015, and of this amount, $173 million will be from the group’s own resources, while the remainder will be grants and borrowings,” the Zesa report said.
“The support from the fiscus has been declining over the years and the last support was received in 2012.”
According to the report, although Zesa was allocated $49,5 million in 2012, only $15,77 million was disbursed. In 2013, they were allocated $15 million in the blue book and in 2014, $18,2 million, but not a single cent was disbursed.
“The limited fiscal space and own resources has necessitated project financing and/or investment funding through joint ventures and loan financing. The group aims to borrow from export credit agencies as well as local and international financial institutions.”
Some of the institutions from which Zesa intends to borrow include China Exim Bank, Stanbic Bank, Afrexim Bank, IDBZ bonds, Zim Fund, India Exim Bank, Preferential Trade Area, Public Private Partnerships and OPEC funding for international development.
“We have high debt due to failure by some customers to settle their bills, especially local authorities and parastatals. The total debt at the end of August 2014 was $947 million, of which Sable Chemicals alone owes $107 million. This drastically limits the availability of own resources for implementing projects,” Zesa said.