Haemorrhaging ZESA sees loss doubling to $233 mln

Haemorrhaging ZESA sees loss doubling to $233 mln

HARARE, November 21 (The Source) – Zimbabwe’s power utility ZESA Holdings has incurred a loss of $140 million in the nine months to September, which is expected to widen to $233 million by year end,  an official has said.
Last year the parastatal reported a loss of $111,4 million.

“We are actually haemorrhaging as it is. We are selling power at below cost,” said ZESA chief executive Josh  Chifamba on Monday while addressing a parliamentary committee on energy.

“The utility has not been awarded a tariff increase since 2011 and there has been no financial provision for the temporary emergency power plant and this has negatively affected the financial position of the utility.”

Last year, government contracted a local firm — Sakunda Energy — to set up an emergency diesel power generation plant from which ZESA would purchase electricity to augment its own erratic generation capacity.

The emergency plant, located at Dema, generates 100MW, which ZESA takes up at 15 cents per Kilowatt hour.

Parliamentarians who visited the site last week condemned the tariff as expensive compared to imports from South Africa’s Eskom and Mozambique’s Hydro Cahora Basa which come in at an average of  9.42 cents per kilowatt hour.

ZESA subsidiary, ZETDC sales electricity at 9.86 cents per kilowatt hour.

Electricity sales to the domestic market are seen coming at $727 million in the full year to December against an initial budget projection of $1.2 billion.

So far only $549.6 million has been realized from local electricity sales in the nine months to September.

Zimbabwe’s power demand has fallen by nearly 40 percent over the past decade, the result of the decimation of industry over years of economic decline.

In May, Patson Mbiriri, permanent secretary in the Ministry of Energy and Power Development, told mining executives at a Chamber of Mines meeting that the country’s power demand has declined to about 1,400 megawatts, about 37 percent, from about 2,200 megawatts about in 1999.

ZESA, which employs 7,000 workers across its four subsidiaries, says employment costs are expected to take up $155.4 million for the year compared to $161.4 million last year. As at September 30, employment costs had taken up $112.8 million.  
Finance charges are seen at $22.5 million against an initial budget of $16 million. Last year finance costs  amounted to $20.2 million.

ZESA is itself owed more than $1 billion by non-paying consumers of electricity.