Zimbabwe power utility owed over $900mln as govt departments, households default

Zimbabwe power utility owed over $900mln as govt departments, households default

By Kuda Chideme, HARARE, 11 May (The Source) – Zimbabwe’s power utility is owed close to $1 billion as government departments, public enterprises and a number of local authorities have failed to settle their electricity bills, Parliament heard on Monday.

The southern African country currently generates less than half of its 2,200 megawatt peak demand from its ageing plants, with persistent power outages crippling industry and mines and keeping households in the dark for as long as 12 hours daily.

Zimbabwe’s cash-strapped government has for decades failed to make significant investments to expand generation, although there are plans to upgrade the 750MW Kariba hydro plant by an additional 300MW under a Chinese-funded deal.

Zimbabwe Electricity Transmission and Distribution (ZETDC) managing director Julian Chinembiri told a parliamentary committee on mines and energy that in total local authorities owed $194 million, while state owned enterprises owed $25, 8 million.

Government ministries are in arrears to the tune of $18, 3 million.

“As we speak (arrears for) domestic customers are sitting at more than $299 million which is 30 percent of the total debt but at least with domestic customers we are collecting that at a prescribed rate since most of them are on the prepaid platform,” he said.

Chinembiri said the power utility was in talks with Kwekwe-based fertilizer manufacturer Sable Chemicals to settle its debt of over $100 million, but said the plant will not be switched-off given its importance to the national economy.

Sable is Zimbabwe’s sole manufacturer of ammonium nitrate (AN) but its profitability has been largely compromised by outdated, high maintenance equipment and prohibitive power tariffs, which result in higher costs of production.

ZETDC, on the other hand, is saddled by a $374 million debt of which $132, 5 million is owed to the government, the central bank and commercial lenders.

The bulk of the external debt is to do with legacy debt from the World Bank and a current one from Afreximbank of $53 million.