Govt To Provide Bridging Finance To ZESA

Deputy Energy and Power Development Minister, Magna Mudyiwa said that her Ministry is considering providing bridging finance to power utility, ZESA Holdings.

Mudyiwa revealed this at the Confederation of Zimbabwe Industries annual congress in Victoria Falls on Thursday. She said:

The ministry is seeking an interim bridging funding package to rescue Zesa Holdings from liquidity, while a tariff review is being considered.

The current electricity tariff has gone below US1 cent per kilowatt-hour, and this is not sustainable.

It is a situation that calls for an urgent review of the tariff regime that we have in place so that we can bring the tariff structure to par with that of other regional players.

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I, therefore, encourage the industry and private sector to consider paying cost-reflective tariffs. Profits are good, but for the utility to remain operational, it has to service its debts, procure resources and maintain equipment.

I dream of a day that industry and commercial farms pay upfront for the electricity they use. Pre-payment will assist Zesa Holdings to recover the current debt and avoid it altogether in the future.

Mudyiwa disclosed that Zimbabwe still owes US$80 million to HCB of Mozambique and Eskom of South Africa.

She said that ongoing negotiations between Zimbabwean and South African governments will hopefully be successful. She said:

Our hope is for successful negotiations (between Zimbabwe and South African governments) over payment plans to settle the debt. We are expected to yield between 400Mw and 600Mw of power from the discussions with Eskom.

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