Zimbabwe to pay off Nampower $40m debt
http://www.theindependent.co.zw/
May 17, 2013 in Business
ZIMBABWE is expected to have more than 100 megawatts (MW) additional power
on its supply grid by November this year after Zesa Holdings (Zesa) has
expunged a US$40 million debt owed to Namibian state-owned electricity
company NamPower, Energy minister Elton Mangoma said.
Report by Taurai Mangudhla
The US$40 million is in respect of a February 2007 deal in which NamPower
gave Zesa a loan to refurbish its Hwange Thermal Power Station.
Zesa was to repay the debt by exporting 100MW during peak periods and 150MW
off peak to Namibia daily for five years given Zimbabwe’s then
hyperinflationary environment and lack of foreign currency.
“The power purchase agreement is for 150MW so you can see it’s a lot of
power which when that contract terminates we will be able to have another
100 to 150MW supplied to the country,” Mangoma said.
The 150MW is expected to reduce the country’s power deficit which currently
stands around 800MW.
Mangoma said Zesa was currently supplying NamPower with electricity worth
between US$4 to US$5 million each month.
“What they have done is to ask us to sign a power purchase agreement which
is a lot more than the amount that they have given us, for instance, we have
got a contract that says we should be able to export power which sometimes
is in the region of US$4 to US$5 million a month to them,” he said.
“As you can see if we were just repaying with electricity we could have just
taken ten months or one year and finished it, but they instead actually pay
us for that electricity or a portion of it until the end of the power
purchase agreement which is in October.”
Zimbabwe’s power purchase agreement with Namibia was expected to be fully
met last year, but it was extended for another year after the country failed
to honour the agreement on account of persistent power generation
challenges.
In September last year, Mangoma announced Zimbabwe would continue supplying
Namibia with electricity until it clears the debt.