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- Zimbabwe bails out ZESA Holdings for settlement of US$890,000 debt to Eskom.
- A deal was signed with Eskom for partial payments of $890 000 per week towards the settlement of the $33 million debt with the last one paid this week
Zimbabwe’s Energy Minister Fortune Chasi, has tweeted that Zimbabwe government has moved to bail out struggling power utility ZESA Holdings through settlement of a US$890,000 debt owed to South African power generator, Eskom. The move has enabled ZESA to clear its debt with Eskom and will be able to negotiate to borrow more power from the company.
Zimbabwe owed South Africa’s ESKOM Holdings SOC ltd, the power utility, US $33m. After its debt reached $33-million, Eskom threatened to cut off electricity supplies to Zimbabwe. In August 2019 a deal was reached for partial payments of $890 000 per week towards the settlement of the debt. The last US$890 000.00 for imports was paid this week.
Zimbabwe has been facing daily power cuts for the last several months. It is hoped that additional supply from Eskom will ease the power crisis. The country is heavily dependent on its coal and water resources for electricity generation. The bulk supply comes from the Kariba Dam Hydroelectric Power Station (750 MW), Hwange Thermal Power Station (920 MW) and three smaller coal-fired power stations managed by the ZESA subsidiary, the Zimbabwe Power Company (ZPC). Receding water levels at the Kariba Dam, as well as technical faults at the Hwange Power Station, led to an unprecedented crisis causing the electricity supply to drop to less than half of the country’s demand.
Zimbabwe faces an estimated deficit of approximately 60%. The Zimbabwe Electricity Supply Authority’s (ZESA) generation capacity in February 2016 was estimated at only 845MW, against a projected national demand of 2,200 MW and an installed capacity of approximately 1,940MW.
TO cover the power deficit, the country has been importing power from South Africa, Mozambique, and the DRC. The Minister also added that now the Zimbabwe government will start focussing on settling its debt with Mozambique.
