South Africa’s power utility, Eskom, has set tough conditions for ZESA following an agreement of a payment plan between the two power utilities.
Under the agreement, Zimbabwe committed to making weekly payments of US$890 000 to service the US$33 million debt and also undertook to submit weekly reports on this arrangement.
No leniency will be accorded Zimbabwe since under the deal, failure to make payments on the part of Zimbabwe, even if the delay is by a single day, will result in Eskom immediately calling in the guarantee.
According to Business Times, the power supply agreement is backed by a US$15 million guarantee from a regional bank.
Reports claim that some officials within Eskom were not willing to extend grace to Zimbabwe arguing that the power utility, which recently reported a billion-dollar loss, was crippled.
An official familiar with the developments told the publication that the negotiations were not easy. The official is quoted as saying:
Negotiations between Eskom and Zesa were not easy given Zimbabwe’s record in servicing debts.
Zimbabwe has to adhere to several conditions to keep this arrangement active. Eskom has made it clear that it will not hesitate to switch off Zesa if it fails to effect its payments.
More: Business Day
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