Commercial Farmers Union of Zimbabwe

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Power crisis hits dairy industry

Power crisis hits dairy industry

via Power crisis hits dairy industry – DailyNews Live 14 July 2014 by Ndakaziva Majaka

HARARE -  Zimbabwe’s dairy industry is losing nearly $100 000 in potential revenue annually due to excessive power outages currently rocking the country, a recent study has revealed.

According to the Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) report on Agro-Industries/Food and Beverages Value Chain, the country has been producing around 50 million litres per year against a combined capacity to produce about 400 million litres annually.

Zimbabwe’s national milk demand is estimated at 240 million litres. The land-locked country currently generates approximately 1 300 megawatts (MW) against peak demand of around 2 200 MW.

“The product losses resulting from the power outages are estimated at a maximum of 2,5 percent of total production,” Zeparu said in the report, adding that milk processors are “under capacitated”.

The think tank said a litre of milk is going for an average $1,45, which is more expensive than imported milk.

It said Zimbabwe’s dairy industry was fairly well developed with seven major processors and over 20 smaller processors. Major milk processors in the country include listed Dairibord Zimbabwe Holdings Limited, Alpha Omega Dairy and Dendairy.

They produce yoghurt, cheese, powdered milk, milk-based beverages, ice cream and liquid milk — pasteurised and UHT milk.

“The overall capacity utilisation is below 50 percent mainly due to low supplies of raw milk from the farms,” Zeparu said.

“Milk output from the farms has been declining over the years,” Zeperu said.

According to the study, this has led to decline in capacity utilisation and thus impacting negatively on production costs and price to the final consumer and the influx of imports from neighbouring countries, for example Zambia and South Africa.

Massive load-shedding begins

Massive load-shedding begins

Load sheddingFelex Share Herald Reporter
Many Zimbabwean football lovers will miss FIFA 2014 Soccer World Cup matches because of increased load shedding, with the latest schedule published by Zesa showing that some areas will be without power almost daily.
The World Cup begins in Brazil tomorrow.

Businesses have not been spared from the load-shedding as demand for power soars during winter.

Eastern suburbs like Mandlay Park, Ruwa, Chadcombe, Epworth, Queensdale and Msasa Park, which fall in the H14 category of the load shedding schedule, are going for up to 16 hours without electricity.

The situation is the same for western high-density suburbs like Warren Park, Glen Norah, Mufakose and Kambuzuma.

Other areas will go for nine hours without electricity daily.

In a statement yesterday, Zesa said the country’s maximum demand reached 1 800MW in winter, against generating capacity of between 1 350MW and 1 400MW.

“To this end, Zesa has put in place measures to boost power generation and reduce consumption to minimise load shedding.

“In spite of the measures power supply shortfalls will still be experienced.

“It should be noted that the published schedules should be treated as a guide since power supply and demand are dynamic,” the utility said.

Zesa said major referral hospitals and sewer installations, national security establishments, key airports and broadcasting stations would be exempted from load shedding.


“In addition, winter wheat irrigation will receive additional support in the 2014 season to ensure the success of the crop,” Zesa said.

“Consumers are being called upon to play their part in reducing demand by using the available power sparingly. All non-essential loads and appliances should be switched off at all times. Non-essential lights and office equipment should be switched off overnight.”

Confederation of Zimbabwe Industries president Mr Charles Msipa said load-shedding would disrupt efforts to revive capacity utilisation.

“While we understand that Zesa has a difficult task in balancing demand and power generation they should also put at the forefront the industry and manufacturing sector,” he said.

“Many of them are trying against all odds to retain and built market exports and these outages will have a negative impact. They should always consult first not just pick what they think are strategic areas as they leave other areas as they did.”

Residents said Zesa should do more on power generation.

“What pains most is that this is coming a few days before the World Cup,” said Mr Tinashe Tiki of Glen Norah.

“Everyone has been counting down towards this only to read that we will not have power when exciting matches will be played.”

Mr Paymore Mbidzo said load-shedding was unfair as some areas appeared favoured.

Zesa said it was considering installing new boiler technologies for its three thermal power stations in Harare, Bulawayo and Munyati to reduce the power deficit.

The stations are hardly in use as they require a special type of coal from Hwange to fire them.

The new technologies will allow use of different types of coal obtainable from areas closer to the stations.

The project will give the country 240MW.

Faults at Power Stations Trigger countrywide blackout

Faults at Power Stations Trigger countrywide blackout

blackHerald Reporter
Electricity supplies were disrupted throughout the country yesterday following faults experienced at the country’s three major power stations. Zesa Holdings said in a statement that the power stations affected were Kariba Hydro-Power Station, Hwange Power Station and Harare Power Station. The cause of the power failure was yet to be ascertained, although Zesa Holdings spokesperson Mr Fullard Gwasira said in a statement that it was caused by “a power system disturbance that originated from outside the country’s borders”.

He said electricity distribution was affected throughout the country.

Technicians were battling to restore normal supplies by yesterday and many areas were expected to receive normal supplies soon.


Only Bulawayo and Munyati thermal power stations were not affected by the technical fault, but they do not have capacity to sufficiently power the country.

Hwange Power Station has the installed capacity of 920 mega watts to the national grid, while Kariba Hydro-Power Station can provide 750 mega watts, with Harare Power Station managing only 90 mega watts.

Zesa Holdings’ subsidiary, the Zimbabwe Electricity Transmission and Distribution Company, has been carrying out planned shutdowns to allow allow maintenance work in most of parts of the country.

The situation has been worsened by the winter season where there is huge demand for electricity.

Areas in Masvingo, Harare and Manicaland provinces were recently affected by such a shutdown.

Zimbabwe affords only 1 300 megawatts of power against a demand of 2 200 megawatts during the peak season like winter.

Zesa Holdings has since embarked on massive power blackouts throughout the country to help serve electricity.

Power outage hits capital

Power outage hits capital


A POWER outage affected Harare and some parts of the country yesterday bringing business to a standstill for several hours.


Power went off at around 8:30 in the morning and was only reconnected around midday. This forced many businesses around the country to resort to generators.

ZESA Holdings (Zesa) spokesman Fullard Gwasira said the blackout was a result of a technical problem at one of the power utility’s stations in Kariba.

“We had a system disturbance on the national grid, but all the generators at Kariba station were restored,” Gwasira said.

“At Hwange Power Station, we are expecting that they will finish servicing some of the generators today (yesterday).”

This is not the first time the city and some parts of the country have gone for hours without electricity due to technical faults.

Power supply not guaranteed: #Zimbabwe

Power supply not guaranteed: #Zimbabwe | The Herald

via Power supply not guaranteed: Govt | The Herald March 18, 2014 by Tendai Mugabe and Daniel Kachere

Minister Mavhaire

Energy and Power Development Minister Dzikamai Mavhaire says he cannot guarantee the nation of adequate power supplies to ensure successful implementation of Zim-Asset, especially in terms of the economic blueprint’s value addition and beneficiation clusters.
Minister Mavhaire said major projects like Batoka Hydro Power Plant on the Zambezi River and expansion of Hwange Power Station would only be complete well after the Zim-Asset target in 2018.

Addressing students taking Joint Command and Staff Course Number 27 at Zimbabwe Staff College in Harare yesterday, Minister Mavhaire said   “Zim-Asset is not the end of Zimbabwe”.

He was presenting a paper on the prospects and challenges towards developing energy capacity to meet the demands of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.

“Is the nation going to have adequate power to implement programmes under the Zim-Asset?” he asked.

“I cannot answer this question with a resounding yes, as I will not be truthful to you. What I can say is the situation will have drastically improved by 2018.

“Staff officers, Zim-Asset is not the end of Zimbabwe, there will be life after Zim-Asset. We have already started planning for the period after Zim-Asset, with plans at an

advanced stage for the construction of Batoka Hydro Plant on the Zambezi River and expansion of Hwange Power Station.”

Zim-Asset, which is the Government’s economic blueprint guiding its policies from 2013 to 2018 identified energy as an enabler for achieving maximum output expected from beneficiation of the country’s resources.

Minister Mavhaire raised a cocktail of challenges which he said contributed to power outages over recent months.

“I want you to go out and explain to your relatives and friends that the major causes of what we are experiencing is because power projects are capital intensive, with even a small power generating plant requiring several hundred million dollars,” he said.

“Local funding is inadequate — we have to look for external loans. People are not paying their dues and sanctions led to non-procurement of critical spare parts.”

Minister Mavhaire also blamed vandalism of infrastructure and brain drain as contributory to erratic power supplies.

He said Zimbabwe was experiencing power shortages despite its vast resources that could be used to improve the situation.

Minister Mavhaire said the country had 12 billion tonnes of coal reserves and vast reserves of methane gas, capable of being used to generate electricity.

He said the country’s thermal power stations were operating below capacity because of illegal Western sanctions imposed on the country a decade ago.

Minister Mavhaire urged people to use renewable sources of energy such as solar power, while Government and experts explored wind turbine technology possibilities.

In the meantime, Minister Mavhaire said his ministry was instituting measures to improve electricity generation, such as licensing independent power producers.

Minister Mavhaire said Government was expanding two units at Kariba Power Station, with the first one expected to be commissioned in 2017.

When complete, Minister Mavhaire said, this would feed an additional 300 megawatts into the national grid.

He said they were also negotiating for more electricity imports depending on availability in the region.

Turning to fossil fuels, Minister Mavhaire said the state of the pipeline linking Beira in Mozambique and Msasa in Harare posed a major threat to uninterrupted supplies.

In this regard, he said, it was important to have a second pipeline.

When asked if he had voiced his concerns to Zanu-PF’s Politburo or Cabinet before Zim-Asset was adopted, Minister Mavhaire directed The Herald to make a written request for an interview through his   secretary.

China Africa to complete coal mine, 300MW power plant in 2016

China Africa to complete coal mine, 300MW power plant in 2016

via China Africa to complete coal mine, 300MW power plant in 2016 | The Source March 13, 2014

China Africa Sunlight Energy says it will complete its coal mine and a 300 megawatt power station at its concessions in Gwayi, Matabeleland North  by 2016, creating over 4,500 jobs.

Addressing delegates at a Parliament seminar on Thursday, the company’s deputy general manager Charles Mugari said as part of the first phase of the project, the company will build a modern residential complex for 2,000 workers, a coal mine and power plant.

“By 2016 we hope that the mine will be up and running,” he said, adding that the company was converting its special grant to a special mining right.

He said second phase of the power project will focus on methane gas extraction and another 300MW plant to be completed in mid-2017.

The company intends to establish another 400MW plant powered by methane gas.

China Africa is a 50/50 joint venture between Zimbabwe’s Old Stone Investments and Shandong Taishan Sunlight of China, plans to  spend $2.1 billion in the next five years on power generation, coal mining and methane bed gas extraction in  Matabeleland north.

“We have embarked on a very comprehensive exploration process  and by end of this year we will know exactly the minable reserves of methane gas,” he said.

Mugari said the projects, which would be carried out on 100,000 hectares of land would create 4,500 jobs in the next two years in a country where over 80 percent of the adult working population is unemployed.

The company is also planning to build  hotels and business complexes.

“This is going to be the beginning of the creation of an economic zone which will attract more foreign direct investment,” he said.

China Africa will also establish a coking plant for coal required in processing of steel.

Mugari said they had entered into a power purchasing agreement with Zimbabwe Electricity Distribution Company (ZETDC)  although tariffs were being finalised.

A transmission arrangement with the Zimbabwe Energy Regulatory Authority had also been agreed upon.

“We have also completed our environment impact assessment  for the mine and right now we are working on the EIA for the power generation and the documents are with the Environment Management Agency,” he said.

The company is also working with the water ministry to assist in the construction of the Gwayi-Shangani dam which it seeks to benefit from.

Mugari urged Parliament to come up with conducive legislation that encourages foreign direct investment and for government to harmonise its licencing regulations.

On Wednesday another company, Shangani Energy Exploration (SEE), said it has plans for $780 million gas project and build a 400 megawatt power station in the same area.

Zimbabwe hit by power cuts after fault at major plant

Zimbabwe hit by power cuts after fault at major plant

via Zimbabwe hit by power cuts after fault at major plant | Reuters Feb 27, 2014

Zimbabwe has been hit by severe electricity outages following a breakdown at a power plant that accounts for about half its national production, state utility ZESA said on Thursday.

Homes and businesses have suffered rolling blackouts, known as load-shedding, for up to eight hours in the last couple of days, paralysing industry and mining in the southern African country and damaging an already fragile economy.

“There will be an increase in load-shedding until the situation returns to normal,” ZESA said in a statement.

Hwange thermal power station in the northwest of the country, which produces 500-600 MW of power, had halted production due to a “fault that caused a malfunction,” it added.

Lack of fresh investment has left the former British colony relying on ageing plants and a worn out grid, resulting in frequent faults and blackouts.

Harare has licenced independent producers to complement ZESA’s output, but most of the projects are yet to take off because of concerns over investment laws that are compelling foreigners to transfer majority stakes to local blacks.

Zimbabwe produces 1,200 MW of electricity, most of it from Hwange and a hydropower station on the Kariba dam. It also imports 600 MW from Zambia, Mozambique and the Democratic Republic of the Congo to meet current demand. (Reporting By Cris Chinaka; Editing by Ed Cropley)

Consumers owe Zesa $818 million

Consumers owe Zesa $818 million

via Consumers owe Zesa $818 million – DailyNews Live by John Kachembere

National power utility Zesa Holdings (Zesa) says it is owed $818 million by consumers — including government, domestic and commercial users.

It said the unpaid bills were hampering its operations and viability.

Last week, Zimbabwe Electricity Distribution Company (ZETDC) — a Zesa subsidiary — told a stakeholders’ meeting that the defaults were a major cause of the increased load shedding.

“If we had our way, we would have switched off everyone who owes us and it’s provided for in the law. However, the powers-that-be do not allow us to cut off defaulters and they have good reasons for that,” a ZETDC official said.

Figures released by ZETDC indicate that government owes the parastatal $15,8 million while local authorities, mining companies, commercial and domestic consumers owe $147,9 million, $140,3 million, $118 million and $276 million respectively.

On the other hand, farmers and other parastatals owe ZETDC $55,3 million and $23,5 million respectively.

The distribution company, which has over the years found it difficult to deliver its services efficiently due to vandalism and unpaid bills, said it was seeking a five percent tariff increase to help improve its operations.

“The said average expenditure has been than the average tariff awarded. Hence the tariffs we have been awarded in the past have not been sufficient to sustain the minimum activities of the utility,” said the ZETDC official.

The country’s electricity tariffs are currently pegged at 9,86 cents per kWh and are likely to be increased to 10,36 cents per kWh.

A tariff of 9,83 cents per kWh was awarded in 2009, but was reversed and replaced by a 7,53 cents per kWh in February 2009.

There was no tariff hike in 2010 while a 9,83 cents per kWh raise was approved for 2011.

However, the Consumer Council of Zimbabwe (CCZ) said there was no justification for the State-owned power utility, to increase tariffs due to lack of improvement in service delivery.

“Over the years we have not seen an improvement in power generation but increases in tariffs to consumers,” said Phillip Bvumbe, the CCZ chairperson.

Zimbabwe needs about  2 200MW of electricity at peak but generates just 1 300MW, importing the remainder.

The southern African country is currently introducing pre-paid meters to improve it’s the power utility’s revenue and avoid resorting to charges based on estimates.

In 2012, Zesa handed out more than 5,5 million power-saving fluorescent light bulbs to households across the country to curb consumption.

Industry experts however argue that there is need for investments to be made in order to increase the amount of reliable capacity.

“The increase in reliable capacity should be made available at a competitive price,” Douglas Chingoka, the Zimbabwe Power Company corporate executive assistant.

Gloria Magombo, the Zera chief executive said her organisation will deliberate on the tariff application, interrogate the costs of production of electricity and come up with a tariff that will ensure viability of the electricity supply industry but also affordable to all customers.

“It is also important to note that tariff application does not necessarily result in tariff increase.

“Several factors are taken into consideration before a final determination is made,” she said.

CCZ demands Zesa bosses’ pay schedule

CCZ demands Zesa bosses’ pay schedule | The Herald

via CCZ demands Zesa bosses’ pay schedule | The Herald February 7, 2014

The Consumer Council of Zimbabwe has demanded to see the salary schedule for top management at zesa Holdings in the wake of the parastatal’s proposal for an upward review of 5 percent in electricity tariffs against what they termed poor service delivery. Speaking at a stakeholder consultative meeting hosted by the Zimbabwe Energy Regulatory Authority in Harare yesterday, CCZ national chairman Mr Phillip Bvumbe said the consumer protection body would only embrace a tariff increase after they are convinced management was not abusing the parastatal’s funds.

“As a consumer group we feel zesa is a public institution and that the salary schedule of top management be availed to us because since the 2006 tariff review paper that was presented to stakeholders by ZETDC on the pricing of electricity they have not been any notable changes in costing to date.”

“It is against this background that we feel the proposed hike might not be justified hence our demand to see their salary structure,” he said.
However, a ZETDC official argued that although they have proposed a 5 percent upward review since it is inflation related, this year the cost reflective tariff requires a 16 percent increase since a cost of supply study indicates an average tariff of US14,2 cents per kilowatt hour.

“Over the past 5 years we have had only one significant tariff increase while average expenditure has been higher than the average tariff awarded. Tariffs awarded are therefore not sufficient to sustain the minimum activities of the utility,” he said.

A tariff of US9, 83c per kilowatt hour was awarded in 2009, but was reversed and replaced by a US7,53c/kWh in February 2009. There was no tariff hike in 2010 while a US9, 83c/kWh raise was approved for 2011.

Zera chief executive, Eng Gloria Magombo said consultations were ongoing to consider the ZETDC 5 percent tariff hike proposal.

Electricity generation key to platinum refinery

Electricity generation key to platinum refinery

via Electricity generation key to platinum refinery | The Financial Gazette by Shame Makoshori 5 Feb 2014

BILLIONS of dollars required to set up a local platinum refinery could go to waste if government, which has been pushing mines to fast-track the project, fails to assess the real implications of its political decision, analysts have warned.Government, cash-strapped and battling to increase revenues to fund operations, appears to have thrown away all caution, threatening platinum producers with massive penalties unless a refinery is put in place in two years.
Zimbabwe has to invest in additional power generation, for instance, before initiating construction of a platinum refinery, as current power shortages crippling industries are an indication of declining capacity.

Electricity generation should therefore be increased to support any planned project that guzzles power, say analysts.
The construction of a refinery in Zimbabwe would require additional power generation of between 100 and 150 megawatts, according to a note prepared by the Platinum Producers Association, whose membership includes Zimplats, the country’s largest platinum producer, as well as Mimosa Mining Company and Unki Platinum.
Basic infrastructure such as roads, dams, housing and other amenities would have to be built, while additional resources would have to be poured into the modification of existing facilities before rolling out refineries.

“There are power cuts in Zimbabwe, additional generation capacity must be in place,” said John Robertson, an independent economist.
Robertson said given the extent of the requirements, the tight deadlines imposed by government would be difficult to meet.
“They will not do it in three to four years,” he said.

“Platinum mines know that there is no need to build a refinery because they are charged small amounts to process in South Africa,” he said.
The process of extracting metals associated with Platinum Group Metals (PGMs) starts at mining, concentration, which is the crushing and flotation, smelting, Base Metal Refining (BMR), recovery of base metals such as nickel, copper, cobalt and precious metal refinery among others.

In Zimbabwe, only a few stages of the process are carried out, and semi-processed output is shipped to South Africa for refinery.
Debate on whether or not to set up a refinery has also revolved around the feasibility of the plant, given Zimbabwe’s history with refineries.
The country hosts one of Africa’s largest copper processing plants at Alaska, which has been lying idle since global copper prices slid in the 1990s, leading to the closure of Mhangura and other copper operations.

The Alaska plant, which was later used to process copper from southern African producers, remains closed even after massive recovery of the industry across the region, where Zimbabwe has failed to tap into existing opportunities to resume production.
Then there is the Empress Nickel Refinery, which is likely to lie idle for some time following the collapse of the country’s nickel mines, while Africa’s largest integrated steel production plant, the Zimbabwe Iron and Steel Company, has been inactive for many years.
A platinum refinery costing at least US$2 billion could fall into the same predicament, with the massive investments going down the drain if political decisions take precedence over business and economic consideration, analysts warned.

But government has been advocating value addition in Zimbabwe, warning that heavy taxes would be imposed on the exportation of semi processed platinum.
It would be difficult for Zimbabwe to attract the scope and scale of investment needed for the refinery, given a recent standoff between government and Zimplats, which drifted into a public spat after government shifted goal posts on initial agreements. One of the agreements related to Zimplats’ tax requirements, which the Zimbabwe Revenue Authority later ignored and proceeded to demand payment.
Will investors warm up to a deal that will guarantee them minority shareholding in compliance with the country’s tough empowerment laws even after pouring the entire capital?
“If government was to offer them 51 percent shareholding now before building the refinery, then they would go ahead,” said Robertson.
A note from the Platinum Producers Association said; “It definitely makes economic sense to value add our products. The benefit will be advantageous from downstream industries and savings from toll treatment fees”.

“It should be noted that currently there is no smelter or BMR which can accommodate the current PGM materials without expansion and or technical modification of any existing unit.”

“Facilities will be built not only for current production but for future requirements. The producers have submitted a detailed proposal to the Ministry of Mines and Mining Development for the establishment of these value addition units.”

Even within government, there appears to be diverse opinion to government’s current plan, with Mines and Mining Development Deputy Minister, Fred Moyo, a veteran mining administrator and former Hwange Colliery Company Limited managing director, indicating recently that the timeframes were unworkable.
“I am not sure if it will be possible to achieve that deadline since we are left with just one year,” he was quoted as saying.

“This depends on technology, funding availability, skills and as well as timing. We are producing around 400 000 ounces but setting up a refinery (for platinum mines) may cost a billion, US$2 billion, but this is dependent on our production levels,” he said.

US$528 000 salary for ZESA advisor

US$528 000 salary for ZESA advisor

via US$528 000 salary for ZESA advisor | The Financial Gazette by Phillimon Mhlanga 5 Feb 2014

AS the salaries scandal in Zimbabwe’s cash-strapped parastatals deepens, the Financial Gazette can reveal that Dennis Magaya, a business strategy consultant who was controversially appointed by State-owned ZESA Holdings’ subsidiary Powertel Communications in 2012, is earning a monthly salary of about US$44 000.
This comes at a time when workers at the company are grappling with low salaries, with peers in other ZESA units earning far less than what Magaya is taking home.
Documents seen by this newspaper indicate that the government-owned internet services provider engaged Magaya on a fixed-term contract which commenced on September 1, 2012. The contract will run up to August 31, 2015.Magaya is currently pocketing a monthly salary of US$25 176,64 plus a bonus of US$18 610,12  which translates into an annual amount of US$528 000. He is entitled to this package up to August this year, and will be eligible to an upward review that could run up to the end of his contract.
Previously, Magaya was earning a monthly salary of US$26 000 and a bonus of US$13 140,59 under phase one of his contract which ran from September 1, 2012 to August 31, 2013.
Phase two of the contract, which runs from September 1, 2014 to August 31, 2015,  will see Magaya earning a monthly salary of US$24 145,01 and a monthly bonus of US$20 231. The contract is currently in phase two.

Magaya was engaged by the company to implement a five-year business plan he drafted for Powertel through his company, Rubiem Technologies.
Sources with intimate knowledge of what transpired said Magaya’s appointment was fast tracked by ZESA’s group chief executive officer, Josh Chifamba, and board chairman Francis Chirimuuta, in clear defiance of a State Procurement Board (SPB) resolution that had rebuffed the appointment of Rubiem Technologies.

To avoid conflict of interest, SPB said Magaya and his company could not take part in the implementation of the strategic plan which he had drafted.After SPB turned down the power utility’s request to engage Rubiem Technologies, ZESA decided to engage Magaya in his individual capacity, arguing that its subsidiary would generate millions of dollars in revenue through the provision of data carrier, mobile internet and connectivity services through his assistance.
His appointment sucked in former finance director, Warner Mtisi, who doubled up as the company secretary. Mtisi was fired two days prior to Magaya signing his contract on September 7, 2012 after he resisted the move to appoint Magaya on such a hefty package.

Former managing director, Samuel Maminimini was also sacked after he questioned some irregularities on the issue.
It is, however, understood that Mtisi has since won his case at the labour court although Chifamba is said to have appealed against the court ruling.
Magaya, who was in South Africa when contacted by the Financial Gazette on Tuesday, was unwilling to discuss the issue, saying the managing director, Patrick Chivaura, was well-placed to do so.

“I can’t comment on the issue now,” said Magaya. “Give me a call in 30 minutes or you can contact the managing director (Chivaura) for more details.”
No comment could be obtained from Chivaura as he was said to be in a meeting.
The Financial Gazette could not immediately establish how much the managing director was earning as efforts to get clarification on the issue were fruitless.
Some sources, however, said Chivaura was taking home around US$4 500 per month.

The rot at the institution comes after senior executives at the Zimbabwe Broadcasting Corporation (ZBC), the Premier Services Medical Aid Society (PSMAS) and the Harare City Council have been exposed for earning mega salaries of between US$36 000 and US$230 000 per month.
PSMAS chief executive officer Cuthbert Dube, who has been retired, and ZBC boss Happison Muchechetere, who has been suspended, earned about US$230 000 and US$40 000 per month respectively.

When benefits are factored in, Dube earned half a million dollars every month.
Dube received allowances equivalent to his monthly basic salary of US$230 000 plus a bonus of over US$1 million in December 2013.
The Minister of Media, Information and Broadcasting Services, Jonathan Moyo is understood to have written to Muchechetere and ZBC’s Elliot Kasu (general manager-finance and administration) advising them of the termination of their salaries and benefits.

State enterprises are being systematically looted by executives allegedly conniving with senior government officials while the economy stagnates.
Audited financial records of parastatals have not been made public on time as enshrined in the Constitution. When they are made available, they are always years behind.

Mavhaire dissolves eight energy sector boards

Mavhaire dissolves eight energy sector boards

via Mavhaire dissolves eight energy sector boards | The Source February 5, 2014

Energy and power development minister Dzikamai Mavhaire has dissolved the boards of eight state-owned enterprises under the supervision of his ministry, accusing them of underperforming during the past five years.

The boards were appointed by ministers belonging to former coalition partners, Movement for Democratic Change, during the tenure of the inclusive government which ended last August.

He did not say when the new boards would be appointed.

Mavhaire said the decision to dissolve the boards was also made after the tenure of the state-owned power utility board, Zesa Holdings lapsed last December.

The dissolved boards include those for Zimbabwe Power Company, Zimbabwe Electricity Transmission Distribution Company, Powertel, Zesa Enterprises, National Oil Infrastructure Company, Petrotrade, Zimbabwe Energy Regulatory Authority and the Rural Electrification Agency.

“You know all boards serve at the pleasure of the minister and that all ministers come with their own style in the way they operate. If I’m not happy because I don’t want things to be done as usual, we have a mandate and we have ZimAsset to  cover,” Mavhaire said.

The Zimbabwe Agenda for Socio Economic Transformation (ZimAsset) is an economic blueprint launched by the ZANU-PF government to guide the country’s economic direction up to 2018.

“I have been here for five months and hard luck, I’m not happy, I’m not enjoying. The job that they have done during that time was good but the road that we are going, I think, needs a new team. I need a clear vision, I need people who are able to understand my orientation, people who are able to understand the road where I am going. I’m not saying all of them will go, others will have the luck to come back but as usual, not all will come back.”

The country has experienced power shortages in the last decade due to obsolete equipment and limited investment in the energy sector, paralyzing industry and starving households of electricity.

Massive increase in power tariffs looms

Massive increase in power tariffs looms | The Herald

via Massive increase in power tariffs looms | The Herald February 6, 2014 by Golden Sibanda

ZIMBABWEANS could face the biggest increase in the cost of power since dollarisation after the Zimbabwe Electricity Transmission and Distribution Company proposed a 5 percent tariff increase, way above the inflation rate which stands at 4.3 percent. ZETDC made theproposal during a tariff review stakeholder consultative meeting, also attended by fellow Zesa Holdings subsidiary — Zimbabwe Power Company —with the Association for Business in Zimbabwe in Bulawayo late last month.

ZETDC said a marginal increase in the tariff will be detrimental to its operations in the long-term.
It said a 5 percent increase was in line with inflation.

The firm said only one significant increase had been effected since dollarisation of the economy in 2009.
“Average expenditure has been higher than the average tariff awarded. Tariffs awarded (are) not sufficient to sustain the minimum activities of the utility,” said ZETDC.

A tariff of US9, 83c per kilowatt hour was awarded in 2009, but was reversed and replaced by a US7,53c/kWh in February 2009. There was no tariff hike in 2010 while a US9, 83c/kWh raise was approved for 2011.

ZETDC said there was no tariff change in 2012 with a 0,3 percent increase to US9,86c/kWh effected in 2013 as the utility made losses since 2009.

The tariff hike request, the firm said, was meant to enable mobilisation of resources to fund plant and network maintenance backlog, correcting distortions in the current tariff, with the current cost of running the business at US10,51c/kWh.

The 5 percent tariff increase proposal is based on a US$986 million revenue requirement, which ZETDC said was in line with its 2014 planned expenditure.

It said the proposed tariff was premised on the rate of return methodology, an approved methodology widely used by other power utilities internationally.

The company pointed out that while its revenue requirement is based on budgeted expenditure, the effective electricity tariffs should be cost-reflective covering efficient costs of its operations only.

The power utility’s proposals may however meet stiff resistance from already burdened consumers some of whom believe that there are flaws in ZETDC’s model, pertaining to alleged inefficiency (and its effect on cost) as the utility is not splitting the various customer types in the cost of supply model.

“I believe we should present an analysis of this, possibly by using the relationship of various supply types (188, 33, 11kVA, domestic etc) from other countries,” said one captain of industry in mining.

ZETDC has since lined up a number of measures to improve efficiency and these include installation of statistical meters to help manage losses.

There will also be migration to pre-paid meters to reduce customer service costs, network system upgrade and refurbishment to improve on transmission network reliability and help reduce losses.

Further, there would be upgrading of billing system and minimising staff costs by keeping staff strength at 80 percent of requirement while cost centers will be managed down to depot-levels.

It is expected that this will result in improved service delivery, value for money, better infrastructure maintenance and availability, improved power supply security through generation expansion projects and viability of the utility.

Government cancels ZESA tender

Government cancels ZESA tender – SundayMail

via Government cancels ZESA tender Sunday, 26 January 2014 by Darlington Musarurwa and Brian Chitemba SundayMail

Currently, electricity consumers have to queue in order to purchase electricity vouchers at Zesa outlets but once they close units will no longer be available. The recent cancellation of the tender meant to select aggregators means consumers have to put up with queues for a bit longer.

Electricity users on the pre-paid platform will continue to endure the inconvenience of purchasing their units at a few local outlets as the tender to choose aggregators to retail them was recently cancelled over allegations of deep-seated corruption and favouritism, it has emerged.

Currently, about 350 000 pre-paid meters out of a targeted 800 000 have been installed.

Information gathered by The Sunday Mail Business indicates that the tender to appoint aggregators for the resale of pre-paid electricity units – tender number ZETDC/HO/04/ 2013 – which closed on October 29, 2013, attracted more than 40 bidders who were willing to cash in on the vending business.

It is understood Zesa (Zimbabwe Electricity Supply Authority)’s system could only interface and accommodate at least four aggregators.

However, allegations emerged during the bidding process that companies that were earmarked to win the bid had been pre-determined by corrupt officials from both Zesa and the State Procurement Board (SPB).

Questions were mainly raised over the adjudication process as one of the bidders, Denallaire Technologies, trading as Revma, was part of the adjudicators.

Furthermore, Revma “was awarded a tender by ZETDC and SPB in 2011 to install a new power-billing system to which they duly installed their Itron 3E System”.

One of the companies that was involved in the process picked up the information and subsequently wrote a damning letter dated November 20, 2013 addressed to SPB and copied to the Minister of Energy and Power Development, Dzikamayi Mavhaire, Deputy Minister Munacho Mutezo, the Anti-Corruption Commission, ZETDC (Zimbabwe Electricity Transmission and Distribution Company) managing director, Zimbabwe Republic Police Serious Fraud, Parliament of Zimbabwe and the Office of the President.

“I am writing to register a complaint with the on-going ZETDC tender process and to pre-empt a clearly designed corrupt adjudication process. I want to complain on the fact that one of the bidders is part of the adjudicators, a situation that is clearly illegal and corrupt.

“One Denallare Technologies (Pvt) Ltd t/a Revma Zimbabwe (Itron) was awarded a tender by ZETDC and SPB in 2011 to install a new power-billing system to which they duly installed their Itron 3E System.

“ZETDC has gone to invite bids for the appointment of electricity vending aggregators through Tender Number ZETDC/HO/04/ 2013 the process which is currently under evaluation. The invitation to tender document says the Itron 3E software supplier (which is Revma) is going to carry out conformance testing for shortlisted bidders and in this case Revma Zimbabwe, who holds the Itron Agency in Zimbabwe.

“However, the same company, Revma, has also tendered for the aggregator tender which means they will technically evaluate other competitors and themselves. Clearly this is a serious breach of ethics and ZETDC and Revma are acting corruptly,” read part of the letter, adding: “We have a situation where Revma is competing with other bidders in a contest they are going to adjudicate. In short, Revma as the ZETDC technical partner and Itron 3E provider can simply not participate in this tender.”

What also seemed to irk bidders was the fact that two of the directors in Revma, including Mr Nick Bakaris, who allegdly influences the company, are foreign nationals.

Noted the letter: “One Nick Bakaris, who is a director of this company, is Greek. The Indigenisation law as it is now does not allow for people like him to participate in this type of tender (a reserved sector) but already he is attempting to vend electricity which is under the reserved retail and wholesale sectors.

“Nick being of Greek origin is not considered as an indigenous person under the Act even if he may be Zimbabwean, period.”

Revma, however, has two local shareholders, Themba Mpofu and Phyllis Muzhingi. There were various other allegations from different stakeholders that made the whole tender process both murky and messy.

Minister Mavhaire subsequently cancelled the tender under PBR 1695 of December 19, 2013.
In an interview last week, Senator Mavhaire confirmed that Government had indeed cancelled the tender after unearthing anomalies that could have ultimately affected workers.

“If we had allowed the aggregators to sell electricity pre-paid electricity units, consumers were going to pay more because these businesses would increase the price to make a killing while at the same time, burdening the consumers.

“We couldn’t allow such a situation to prevail in Zimbabwe. This is not a jungle, so we had to cancel the tender last month. Government has since notified the aggregators, some of whom were bragging in bars that they had already won the tender,” said Senator Mavhaire.

Presently consumers purchase electricity units at Zesa offices and once the offices are closed many are forced to sleep in the dark.  In the capital, consumers have the convenience of buying power from a few retail outlets that close at 10pm, but these centres are not easily accessible to the bulk of energy users.

Government is, however, currently engaging State enterprises NetOne, Powertel and Zimbabwe Posts (Zimpost) to introduce convenient ways for pre-paid electricity resale.

“We are finalising finer details of a new deal with the companies (NetOne, Powertel and Zimpost). We may come up with a new system similar to that of sale of pre-paid airtime used by mobile network operators so that consumers access power conveniently,” explained Minister Mavhaire.

The State Procurement Board could not immediately comment as questions e-mailed to the executive chairman, Mr Charles Kuwaza, were not responded to at the time of going to press. Of late, controversies surrounding the SPB over flawed tenders have been rising, with stakeholders accusing the board of prejudicing Government projects and the fiscus.

It has mainly been blamed for stretching the approval process for tenders and in some cases awarding tenders to either incompetent companies or blacklisted firms to carry out Government projects.

In 2012, Zimbabwe Revenue Authority Commissioner-General Mr Geshom Pasi claimed that a contractor appointed by the SPB to build staff accommodation at Beitbridge Border Post had failed to complete the work more than three years after being given the work.

Government has already paid for the project. He further indicated that the SPB was frustrating efforts to give the work to another contractor. The pre-paid meter system and the sale of electricity units are considered as projects that are crucial for the turnaround of Zesa as they could significantly improve cashflow while efficiently distributing power.

Analysts believe that if successfully implemented the projects will improve Zesa’s credit rating and boost its capacity to attract both funding and project partners. Last week, Cairo-Egypt based Afreximbank (African Export and Import Bank) announced a US$35 million facility for Zesa to complete its prepaid meter project.

Efficient power use to save Zim $115m

Efficient power use to save Zim $115m

via Efficient power use to save Zim $115m – DailyNews Live  8 JANUARY 2014 

Zimbabwe Electricity Transmission and Distribution Company (ZETDC) — a subsidiary of power utility Zesa Holdings — says the country could save up to $115 million annually through efficient power demand side management.

Demand side management is the planning, implementation and monitoring of programmes and activities carried out by the national power utility to modify consumer demand pattern or load curve without compromising on customer value.

Howard Choga, ZETDC acting managing director, recently said that through improved energy efficiency, industrial, commercial and domestic electricity users can save up to 19 percent of the country’s total consumption.

“The country’s potential savings are equivalent to 1 650 GWhs ($115 million) annually,” he said.
This comes at a time when Zimbabwe is facing acute power shortages due to lack of investment in the sector.

The country requires at least 2 200 MW per against an electricity production of a little over 1 000 MW.
Choga noted that in demand side management both customers and utilities carry out defined activities that result in the utility reducing system investment and operational costs and consumers benefitting from reduced electricity costs.

“Benefits of demand side management includes a reduction in customer energy bills through better customer energy management and cost savings though reduction or deferment of capital projects by utilities (power plants, lines, substations),” he said.

Improvement in power reliability and quality of supply and the reduction in emissions that contribute to national and international environmental problems such as acid rain and global warming through the deferment of commissioning of coal fired plants are some of the benefits associated with energy conversation.

Choga noted that ZETDC  has so far swapped over one million compact fluorescent lamps in homes resulting in 41 88MW of energy being saved.

“335 000 prepaid meters have also been installed and 65 MW have been saved.

“This translates to 23 percent reduction in energy consumed,” he said.

ZETDC has also had its region engineers trained by Teri of India to advise large customers, while ripple control core systems have been refurbished in Harare and Bulawayo.

Choga however noted that lack of requisite skills, inadequate funding and lack of appropriate legislation and legal instruments are some of the barriers to successful implementation of demand side management.

ZESA technically insolvent

ZESA technically insolvent

via ZESA technically insolvent | The Financial Gazette by Phillimon Mhlanga 12 Dec 2013

POWER utility, ZESA Holdings, the custodian of government equity in the power sector, is technically insolvent and has a negative working capital, creating uncertainty in its ability to continue as a going concern.The situation could have worsened this year after government ordered the parastatal to write-off millions of dollars in electricity bills owed by consumers.

In its latest financial statement published last week for the year to December 2012, the company attributes its woes to outstanding legacy debts estimated to be in excess of US$600 million, which were not being serviced and are now treated as current liabilities.

Analysts fear that unless ZESA receives funding from government, the debt, which is part of the unresolved national debt, would weigh down the company.

ZESA’s current liabilities, which totalled US$944,9 million, far outstripped its current assets by US$479 million, implying that the company may not be able to meet its current liabilities as they fall due.

In the prior comparative period in 2011, the company recorded a negative working capital of US$505 million.

The financial statement showed that the company recorded a net operating loss of US$132,2 million in contrast to a profit of US$24 million in the previous year.

The electricity debtors book ballooned to US$785,1 million from US$650,9 million in the prior year.

However, there was a significant improvement in electricity sales, which increased to US$799,4 million from US$698,6 during the prior comparative period in 2011.

Board chairman, Simbarashe Mangwengwende, described the financial position as precarious.

“The financial position of the group continues to be weak largely due to the legacy debt,” said Mangwengwende in a commentary on the financial position.

“The group is technically insolvent because all outstanding legacy debt, which is not being serviced, is now treated as current liabilities.”

“Although we have an unqualified audit opinion on our accounts because of the letters of comfort from the shareholder, there is an emphasis of matter by the external auditors regarding the going concern status of the group due to the fact that the current assets for ZESA Holdings, ZPC, ZETDC and ZESA Enterprises are less than the companies’ current liabilities,” Mangwengwende said.

“Although this is the same situation for Powertel Communications, the auditors did not issue a similar emphasis of matter because of the very positive trend towards financial viability exhibited by that company.”

Powertel is another subsidiary of ZESA involved in telecommunications.

He, however, remained hopeful that the technical insolvency challenge could be addressed.

“This technical insolvency challenge will primarily be addressed by transferring the legacy debt to government and refinancing short positions on the balance sheet,” he said.

ZESA had hoped the restructuring of the group would provide an opportunity to start the debt transfer, a move that would have strengthened the balance sheets of the group’s subsidiary companies.

However, Energy and Power Development Minister,  Dzikamai Mavhaire, abandoned  the restructuring plan initiated by former minister, Elton Mangoma.

The restructuring was meant to create an efficient structure leading to a vibrant electricity market, capable of attracting investment and provisions of incentives for the efficient utilisation of electricity.

What has worsened the plight of ZESA is that when government issued the controversial directive to slash electricity bills, it was denied it the much needed revenue.

A government’s decree in September to cancel electricity debts wiped about US$80 million off its debtors’ book.

Government is now faced with a huge challenge to take action that can help heal the company which faced a negative impact on financial operations.

This situation presents a major challenge in attracting funds for new developments as it portrays a low credit rating for the electricity market in Zimbabwe.

To ensure that the entities continue as going concerns,installation of prepaid and smart meters  is in progress and is expected to be completed by January 2014, a development which will significantly resolve the problem of debtors.

On completion, cash flows are expected to improve as cash would no longer be locked up in receivables.

The group is also working on the expansion of Hwange Power Station and Kariba South Power station to add 600 megawatts(MW) and 300MW respectively to the national grid.

The Zimbabwe and Zambia governments are also working on the Batoka Project which has an estimated combined output of 1 600 MW and is being driven by Zambezi River Authority.

Power outages push company overheads

Power outages push company overheads

via Power outages push company overheads December 10, 2013  by Victoria Mtomba NewsDay

LOCAL manufacturing firms and mining companies are incurring as much as $8 in costs for every kilowatt hour (kWh)lost due to idleness resulting from frequent power outages, a study by a industrial lobby group has shown.

Speaking at a power sector symposium yesterday, Confederation of Zimbabwe Industries energy and environment committee member Marsden Sibanda said the perennial energy crisis besetting the economy was not only making local firms uncompetitive, but was also threatening the viability of key economic sectors.

He said there was need for strict adherence to the load-shedding schedule per industrial area. He also said a separate plan was needed for intensive energy users.

“At $0,12 per kWh from Zesa or Zimbabwe Electricity Transmission and Distribution Company, it is better than generator at plus $0,33, but recent studies $2,50 and $8,00 per kWh as costs of not having power for industry and mines respectively hence the need to work for a common Zimbabwe solution,” Sibanda said.

Sibanda said while the industrial lobby group fully understood that the power sector was not meeting the current energy demands, there was need to invest in the sector. Zimbabwe’s five power stations are currently generating 1 200 megawatts daily against peak demand of 2 200MW.

Capacity utilisation for the manufacturing sector this year dropped to 39% from 44% in 2012 due to a myriad of problems which include underfunding and frequent power outages.

Sibanda said there was need for clarity on the planned restructuring of Zesa which was announced before the July 31 elections.

Speaking at the same forum, Deputy Minister of Energy and Power Development Munacho Mutezo said government had since resolved to go back to the old Zesa structure and that it would not privatise.

Mutezo said government was implementing projects to address the shortfall since the country had old infrastructure that needed to be rehabilitated.

“We are also looking at investing in other power generating systems which have a short lead time especially solar generating plants as well as small hydros and peaking power solutions. We implore the private sector to come on board to also invest in this lucrative sector. This can give us extra power within a year or so,” he said

Zesa chief executive officer Josh Chifamba said the government had availed $69 million towards the Hwange Power Station rehabilitation while Zimbabwe Power Company contributed $35,29million towards the projects.

Chifamba said the projects undertaken included water systems, stage 11 air systems, electro hydro control system upgrade and stage 1 boiler feed pumps.

He said the power output could have been more, but during this period the power utility carried out maintenance works.

Power load shedding increases

Power load shedding increases


ELECTRICITY load-shedding around the country has increased over the last few days in response to ascending demand and breakdown of machinery at several power stations.


In some instances residents have had to go without electricity for four days every week. This is despite assurances by Energy minister Dzikamai Mavhaire that the power outages were set to ease.

According to the Zimbabwe Power Company (ZPC)’s generation status report of Wednesday, the country’s power stations – Hwange, Kariba, Harare, Munyati and Bulawayo – were only generating a combined total of 965 megawatts against demand of 1 630MW.

The report noted that internal power generation constituted 59,2% of the power supply. The country was only importing 100MW from Hydro Cahora Bassa in Mozambique and 120MW were exported to Namibia in honour of a deal between Zesa Holdings and Nampower.

The report attributed the decrease in power to broken-down machinery, major maintenance work, system disturbance and refurbishment of power units at the various power stations.

In Harare, station 2 was taken out of service on Tuesday due to a leak that developed on boiler 6 header cap. The station had to be taken out in order to conserve feed water which is critically low at the moment.

In Kariba, unit 3 was taken out early last month for remnant life assessment. Experts are mobilising to carry out the stator core repairs and re-tensioning. Work is expected to commence next week.

Unit 1 at Hwange was taken out of service on November 28. Repairs are in progress and the unit is expected back in service tomorrow.

Unit 5 was taken out on in early November for planned major overhaul works. The unit is expected back in service in February next year.

Unit 6 tripped on November 30 due to a system disturbance. The unit developed a tube leak. Repairs were completed and the unit returned to service yesterday morning.

Efforts to get a comment from Zesa were fruitless.

Zimbabwe is currently struggling to meet its energy requirements due to limited investment in the capital-intensive sector. Authorities say power shortages may ease in 2017 after government has completed several power generation projects on the cards.

Zesa to increase power charges

Zesa to increase power charges

via Zesa to increase power charges November 29, 2013  NewsDay

ELECTRICITY users should brace for tough times as the national power utility Zimbabwe Electricity Transmission and Distribution Company (ZETDC) plans to hike tariffs barely three months after it slashed debts for domestic consumers and farmers.

The power company yesterday announced that it had applied to the country’s energy regulator Zimbabwe Energy Regulatory Authority seeking to review its tariffs next year in a bid to boost revenue and improve operational efficiencies.

The development is likely to further pile pressure on consumers already bearing the brunt of an underperforming economy.

“The Zimbabwe Electricity Transmission and Distribution Company has applied to the Zimbabwe Energy Regulatory Authority for a review of the electricity tariff applicable to its customers in 2014 in terms of the provisions of section 53(1) of the Electricity Act (Chapter 13:19),” reads part of the notice.

“This application is seeking a review of the tariff to an average of 11,48c/KWh from the current 9,86c/KWh. This adjustment has been applied using the approved rate of return methodology. This tariff application is based on a revenue requirement $986 362 044 for 2014.”

ZETDC said it planned to raise additional funds to meet operational and maintenance costs and hedge against increased cost of electricity purchases. The electricity distribution company also hopes to improve service delivery, power supply security, infrastructure maintenance and availability and value for money.

Zimbabwe is currently struggling to meet its energy requirements due to limited investment in the capital-intensive sector. Authorities say power shortages may ease in 2017 after government has completed several power generation projects on the cards. As of yesterday morning, local power generation stood at 1 104 megawatts (MW) against a peak demand of 2 200MW.

According to a power generation analysis report provided by Zimbabwe Power Company, Unit 1 at Hwange Power Station was yesterday taken out of service while Unit 5 was taken out a fortnight ago for planned major overhaul works. The unit is expected back in service at the end of February.

Unit 6 was taken out of service on Sunday to enable boiler tube leak repairs and returned to service on Thursday. At Kariba Power Station, Unit 3 was also taken out a fortnight ago for remnant life assessment. Alstom are mobilising to carry out the stator core repairs and re-tensioning

Unit 5 was taken out of service on Wednesday to enable the disconnection of the unit transformer. The unit returned to service yesterday on the station transformer. In September, Zesa credited all domestic customers with a debt relief of $160 per household.

The collective debt relief for farmers was estimated at $80 million while that for ordinary consumers was $90 million.

The power authority has a legacy of debts of close to half a billion dollas that includes those debts taken over from Central African Power Company which used to procure power for the nation.

No power, no investors – Eddie Cross

No power, no investors – Eddie Cross

via No power, no investors says Eddie Cross  28 November 2013  by Charles RukuniInsiderZim

A senior Movement for Democratic Change official and Bulawayo legislator Eddie Cross says Zimbabwe cannot expect any substantial new investment until it is able to guarantee power to those investors.

He told Parliament on Tuesday that Zimbabwe’s economy was not going anywhere until the country resolved the issue of reliable power supply at the lowest possible cost.

“We cannot expect any substantial new investment in Zimbabwe until we are able to guarantee those investors power. Therefore, this issue is of critical importance to us as a nation and should be debated properly and clearly,” he said.

Cross said there were plenty of investors willing to support power generation in Zimbabwe but they were scared of the country’s indigenisation laws.

“There is no investor in the world that is going to put a dollar on the table and have fifty-one cents taken by ZANU PF,” he said.

Below is his full contribution:

MR. CROSS: Thank you Mr. Speaker. I feel that I should in fact make a short statement today on the question of electricity supplies in Zimbabwe because there is a lot of confusion and it is not assisted by this kind of debate.

The power generation facilities in Zimbabwe were built in stages; the small thermal power stations were built prior to 1938. Kariba was completed in 1958 and Hwange was built under United Nations Mandatory Compulsory Universal Sanctions between 1968-1970.

I mention the latter because I was a young man during those days. I participated in the construction of Kariba. Kariba at its time was the largest infrastructure development in the world financed by the World Bank.

Hwange was financed by the Rhodesian Government and the equipment was imported to Rhodesia under United Nations sanctions. I simply cannot understand why our associates on the other side of the House, should claim today that sanctions should be causing, in any way, the kind of crisis we are experiencing today. It is not true.

There are absolutely no restrictions whatsoever on the importation of spares of any kind to deal with any form of electricity generation infrastructure in Zimbabwe today. The power generation capacity of Zimbabwe is about 1200 MW today. It fluctuates a little bit based on the facilities at Hwange, but by and large, I think one of the greatest achievements of the past four years has been to stabilise the two major power stations in the country.

I am pleased to announce today that the contractors have moved on site at Kariba South. This is a major step forward. It is a contract negotiated by the former Minister of Energy and I think it is a good contract. It will be funded by the people constructing the facility and I hope that within three years, Kariba will be able to generate something like 900 MW for us as a nation.

It will not be creating any additional sources of supply because we do not have sufficient water in Kariba but will enable us to fluctuate the production from Kariba to meet our peaks in demand. This is a very important function.

Hwange, I am afraid Mr. Speaker, has been inexplicably delayed. It is in fact the only major new generation source of power to Zimbabwe today. It is capable of being financed today, without any problems at all.

It is a mystery to me as to why this particular contract, like Kariba South has not been awarded. I do not know what the hold-up is today but I would hope that the minister would be more transparent in the way he is handling this business and inform the House when he has the time, as to why this important contract has been delayed.

For the rest, Rhodesia always could depend on surpluses in other parts of Southern Africa for its shortfall in supplies. Therefore, no expansion in the production of electricity in Zimbabwe has been completed in the last 40 years, 34 of which have been under ZANU PF management.

More importantly, during this period, there has been absolutely no maintenance and no reconstruction of these important facilities. Now that the region itself, particularly South Africa, is moving into a deficit position in so far as their own requirements are concerned; these countries are no longer able to supply us on and when required, hence the load shedding.

As far as the future is concerned, Mr. Speaker, the Sengwa project has been on the books for some time, promoted by a major international company based in London, Rio Tinto. There is no question of any kind of restrictions on Rio Tinto regarding this investment. Rio Tinto is not proceeding with this investment simply because of the risk profile of Zimbabwe.

Part of that risk profile is indigenisation. There is no investor in the world that is going to put a dollar on the table and have fifty-one cents taken by ZANU PF. For that reason, Sengwa has not proceeded.

The same applies to Binga. There is another thermal station being planned in Binga. Plans for the thermal station are being funded by the French.

Again, there is no question of any restrictions on the financiers of this; it is the risk profile of Zimbabwe that is impeding these investments.

As far as gas is concerned in Lupane, I think most people now know that the gas in Lupane is not a reliable source of energy. It is unlikely to be developed on any significant scale. Therefore we have to ask, what are the immediate prospects for new energy sources for Zimbabwe?

I want to highlight the new role of Mozambique. Mozambique first found gas just about 150 km South of Beira about 20 years ago. That gas is being delivered to Gauteng today using a pipeline constructed by SASOL.

Recently, Mozambique has discovered major gas in the North near the Tanzanian border. This new discovery Mr. Speaker Sir, is going to turn Mozambique into one of the largest energy suppliers in the world.

These gas reserves are similar to those of Doha in the Middle East. It is going to transform the Mozambican economy. Already, more than US$100 billion has been committed to investment in the Mozambique gas fields.

The other development of concern to us is that just in the last two months, a gas field was discovered just off Beira, about 10 km from Beira port on the other side of the river. This gas field has 4 trillion cubic feet of gas which is bigger than the fields in the south supplying Gauteng. I am reliably informed that using this gas, which is only 183 km from Mutare, we can construct a 2 000 MW power station in Mutare within three years.

Contrary to what my colleagues on the other side of the House are saying, the Indian private sector is prepared to invest in that facility. The issue we have got to look at here is that this is a critical subject for every Zimbabwean; to try and make cheap political points about the so-called sanctions on this kind of issue is simply not doing it justice.

We need to debate this issue. We need to have clarity on it, the future of our economy –[MR NDUNA: Inaudible interjections]- you are quite right. Mr. Speaker Sir, my colleague is debating with me here.

MR. SPEAKER: Order, order, order. Please address the Chair.
Hon Nduna, please avoid direct verbal attack – [MR NDUNA: He is saying there are no sanctions.]- Order. May the hon. member continue please?

MR. CROSS: Thank you Mr. Speaker Sir. I just want to make a point that, until we resolve the question of a reliable power supply for Zimbabwe at the lowest possible cost, our economy is not going anywhere.

We cannot expect any substantial new investment in Zimbabwe until we are able to guarantee those investors power. Therefore, this issue is of critical importance to us as a nation and should be debated properly and clearly.

Thank you very much Mr. Speaker.

Zimbabwe gets $319 mln Chinese loan for Kariba expansion

Zimbabwe gets $319 mln Chinese loan for Kariba expansion

via Zimbabwe gets $319 mln Chinese loan for Kariba expansion | The Source  November 11, 2013  

China Exim Bank on Monday gave Zimbabwe $319 million to fund the expansion of Kariba Power Station project which could help reduce the electricity crunch that has hit the manufacturing and agriculture sectors.

The project will take four years to complete and is for two power generating plants of 150 megawats which would increase Kariba Power Station’s generating capacity to 1050MW. Kariba’s six generating plants produce 125MW each.

“This should go a long way in reducing power outages that characterise our power generation. For us the energy deficit has hamstrung the growth of our economy, “said Chinamasa at an event to sign the agreement with the bank.

Chinamasa said the loan has a two percent interest rate and a five-year grace period and a 20-year tenure. Zimbabwe will contribute $35 million to the project to bring the total cost of the project to $354 million.

China’s Sinohydro won the tender for the expansion work in December last year.

China Exim Bank executive vice governor, Zhu Hongjie said the project should be completed on time.

“We hope to complete it on time to bring benefit to your people,” he said.

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