Eskom to continue Zimbabwe power supplies

South Africa’s power utility Eskom has confirmed it will continue to export electricity to Zimbabwe and other countries in the region after sealing new supply deals.

This was despite ZESA reportedly struggling recently to settle some $43 million worth of arrears owed to Eskom before it was bailed out by the Reserve Bank of Zimbabwe (RBZ).

“In order to grow export sales, Eskom has concluded new export sale agreements with a number of regional trading partners, ranging from 50 MW to 200 MW,” Eskom’s Chief Financial Officer, Anoj Singh, said last week.

“Agreements have already been concluded with BPC of Botswana, NamPower of Namibia, ZESA of Zimbabwe and Copperbelt Energy Corporation of Zambia.”

Zimbabwe, a former key supplier of electricity in the SADC region, has since 2007 experienced crippling power cuts following a protracted economic recession which saw the country struggle to maintain and keep its power plants running.

According ZESA, the national grid will remain in the throes of load shedding for the next five to eight years given the lack of capacity to generate more electricity.

ZESA figures show that the power utility currently generates roughly 1,300 MW at Kariba South Hydro Power Station, Hwange Thermal Power Station and its three other smaller plants combined, while importing up to 350 MW from neighbours South Africa and Mozambique.

In May, South Africa’s Standard Bank announced it had thrashed out a $120 million debt package with ZESA’s power generating unit, the Zimbabwe Power Company (ZPC), earmarked for rehabilitation of its main power plants.

Finance minister Patrick Chinamasa said in his mid-year fiscal review statement last week said that domestic power supply has largely benefited from improved production at Hwange Thermal Power Station.

“Sustainability of electricity supply will, however, be dependent on our ability to invest in additional generation capacity and in ensuring users timeously pay for electricity consumed,” Chinamasa said.

Zimbabwe signed a $1.5 billion agreement with China’s Sinohydro Corp in 2014 to ramp up generating capacity to 600 MW at the coal-fired Hwang Thermal Power Station.

A joint venture project with Zambia to develop the $4 billion Batoka Gorge Hydro power plant, which will produce 2400 MW of electricity, is expected to take off later this year, according to state media reports.

But there have been no updates as to whether the two countries have already secured funding to go ahead with the project, following an investment conference earlier this held in Livingstone, Zambia, to raise money required to build the power plant.

According to a latest study by World Bank economists, Zimbawe’s manufacturing and other sectors continue to suffer from deteriorating infrastructure and an inadequate electricity supply.

ZESA has been operating at a loss since 2012, incurring about $517 million in losses between 2009 and 2016, the World Bank said, calling on the government to implement reforms and attract investment.

“ZESA has faced corporate governance challenges, including the lack of a board of directors and a performance agreement for its major subsidiary, the Zimbabwe Power Company, while a significant increase in personnel costs has crowded out spending in other areas,” said the World Bank.

Source: New Zimbabwe