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Zimbabwe/Zambia electricty debt

Zimbabwe/Zambia electricty debt

http://www.thezimbabwean.co.uk

19.02.13

by Rebecca Moyo

ZESA Holdings says the creation of a sinking fund with a local bank would 
enable Zimbabwe clear its US$70,8 million debt owed to Zambia after the 
creation of a sinking fund with a local bank.

Giving an update on operations before the Parliamentary Committee of State 
Enterprises and Parastatals today, Zesa chief executive Engineer Joshua 
Chifamba said

Chifamba said Zesa had made progress on the old debt owed to its northern 
neighbours clearing the way for work on the Batoka electricity project to 
begin.

“Zesa has paid US$20 million after the creation of a sinking fund with a 
local bank and should have paid an additional US$20 million by the end of 
March this year,” he said.

“The amount should be cleared by the end of March next year with work on the 
project expected to begin within 18 months as expressions of interest had 
been advertised,” he said.

Batoka is situated 50kms downstream of Victoria Falls and would provide 800 
MW of hydro power generation capacity for each of the two countries (1 600MW 
for both).

Zambia said they would not partner Zimbabwe until the asset debt accrued 
during the Federation-era was cleared. The principal amount owing was 
US$70,8 million but there was also an interest charge of US$115 million 
which has been accruing since dissolution. Interest is being charged at 5,2 
million per annum.

The debt also includes proceeds of the sale of assets belonging to former 
Central African Power Corporation disbanded in 1987, where Zimbabwe 
reportedly benefited more. CAPCO was running the Kariba power project for 
the two countries during Federation of Rhodesia and Nyasaland era.

He said the amount owed to Zesa Holdings by customers has ballooned to 
US$730 million since dollarisation of the economy in 2009. Chifamba said. 
huge corporates were the biggest debtors, accounting for nearly a third of 
the amount.

“The money we are owed has risen to US$730 million and of the total amount, 
domestic consumers owe us US$261 million,” said Chifamba. “This puts us in a 
very tight position (in terms of viability).”

Zesa embarked on a rollout programme of prepaid meters last year in a bid to 
improve revenue inflows, but this is moving at a much slower pace than 
anticipated due to funding problems. By last month, Zesa had installed only 
55 000 prepaid meters in domestic premises countrywide since August last 
year against a target of 600 000 households. 

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