via ZESA has no capacity to expand operations: SK Moyo | Radio Dialogue by Lulu Brenda Harris May 28, 2014
Zimbabwe Electricity Supply Authority (ZESA) has no capacity to expand its already suffering power generation because financial challenges, which is a huge barrier in revitalising the country’s economic and socio-growth, a senior minister has said.
It is said ZESA is even failing to pay Hwange Colliery Company for coal supplies, a move straining the colliery’s operations so much that the country has to depend on imports in order to meet the deficit in the domestic power demand.
Addressing delegates at the 3rd annual Zimbabwe Pensions Fund forum organised by MN Capital, Senior Minister in the President’s Office, Simon Khaya Moyo, highlighted the power utility had no means to generate more electricity which was worsened by its dilapidating infrastructure and vandalism acts on its existing installations.
Moyo said this while pointing that a country’s growth was hinged on efficient and reliable supply of electricity that could fuel industry and assist in the delivery of crucial social services.
“ZESA requires about 2. 4 million tonnes of coal per year to power its thermal power generation stations, as of 2008 are responsible for 68 percent of power generation in the country.
The government through the Hwange Colliery Company is selling coal to ZESA at a subsidised price and due to failure to pay the colliery company has been strained in its operations forcing the country to depend on imports in order to meet the deficit in the domestic power demand,” he said.
In line with the theme of pension fund forum, Moyo said the involvement of local pension funds in co-funding the infrastructure development programmes spearheaded by the government would go a long way towards economic growth of the country.
“I call upon the pension houses to assess the possibility of part financing the projects with the requisite prudence and due diligence. The country has faced major challenges in the maintenance and upgrading of the existing power infrastructure.
“The World Bank reports that over 50 percent of the allocated budget for infrastructure rehabilitation is needed for the power sector which urns out to be about 46 percent of the Gross Domestic Product. Therefore for our productive sectors to effectively drive this economic upturn, there is a need for government to expand electricity generation capacity through joint ventures agreements and public private partnerships (PPPs) with co operating partners,” said the senior minister.
In stressing the importance of power and infrastructural development, Moyo said Zimbabwe is home to almost 14 million people with major cities such as Bulawayo, Harare, Gweru and Mutare carrying the biggest burdens due to the continuing rural urban population migration whereas this movement had proven to be strenuous.
“The country has been hit by deteriorating infrastructure over the past decade with some of it now dilapidated therefore the government carries a heavy mandate to immediately rehabilitate projects in key specific areas of infrastructure development.
“In 2010 the government requested the African Development Bank to compile a report that would assist it to formulate strategies of sustainable infrastructure reforms. The bank reported the country requires about US$40 billion for the rehabilitation of the existing huge and diversified infrastructure This calls for earnest and urgent reforms in the regulatory environment in a bid to attract institutional investment,” the senior minister stressed.
MN Capital Managing Director and Head of Institutional Business Development, Michael Ndinisa, said developing economies need to put in place alternative investment strategies that would foster sustainable development.
“In this regard careful analysis is required to identify ways of funding the most lucrative sector such as infrastructure especially in water and sanitations as well as power,” he said.
Ndinisa also asked what he termed the million dollar question: “What are local investors doing towards economic development in Africa,” saying such required strategic thinking as they sought to promote sustainable economic growth through institutional funds investment.