Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Govt to restructure energy sector

Govt to restructure energy sector

Written by Taurai Mangudhla, Business Writer
Monday, 04 June 2012 14:40

HARARE – Zimbabwe plans to restructure its energy sector and make way for 
independent power distribution firms, Zesa Holdings (Zesa) chief executive 
Josh Chifamba said.

He told a Thursday Confederation of Zimbabwe Industries Annual General 
Meeting, the move was in line with government’s plans to improve utility 
services while establishing an independent power regulator.

“There is a lot of progress on that and I wouldn’t want to pre-empt it (but) 
there is a whole white paper on that and the minister is supposed to present 
it to cabinet,” Chifamba said without giving specifics of the proposed new 

The energy sector is currently regulated by Zimbabwe Energy Regulatory 

The Zesa chief’s remarks came after Francis Masawi, an engineer and regional 
independent energy consultant, argued there was an  imminent need to 
restructure the country’s power sector.

He said the current single buyer model-only by Zimbabwe Electricity 
Transmission and Distribution Company (ZETDC)-was an impediment to 
investment in the energy sector.

“Imagine you have a private production company and you want to sell to a 
sole buyer that is owed $500 million by their                 consumers, how 
are they likely to pay,” Masawi said.

“That thing (the single buyer model) must be done away with; it doesn’t 
exist in the Act. It was only transitional.”

Masawi said Zesa should assume a role of shareholder only.

He said competition should be introduced in the supply side of electricity 
just as it is required in the petroleum sector.

“Whatever the reason, the current structure has failed to resuscitate the 
energy sector.”

Zimbabwe currently has         capacity to generate about 1 200 MW of 
electricity, mainly from Kariba Hydro Power Station and Hwange Power Station 
(HPS) compared to a rising national demand of around 2 200MW.

The country’s generation capacity is now half of what it used to be in 1980 
when the economy and population was smaller.

New projects that are meant to improve the current deficit position could 
take longer to commence   after potential takers for the  country’s HPS 
rehabilitation project asked for a one month extension on the June 5, 
tendering deadline.

Chifamba said this would delay adjudication of tender to restore HPS unit 
seven and eight to end of July.

“If we get to a financial close by the end of the year then by early 2016 
there should be something coming out of the two projects,” he said, adding 
his organisation was aware of the anxiety among Zimbabweans for an immediate 
power solution. Zesa, Chifamba said, was not spared by the country’s 
decade-long economic stagnation and needs a lot of investment.

“The state of the equipment at all levels is appalling and dangerous.

That explains the number of accidents we are having now.”

In February government announced plans to unbundle the Zimbabwe Electricity 
Transmission and Distribution Company (ZETDC) into two separate entities to 
improve operating efficiency.

ZETDC is responsible generating, transmitting and distributing power and was 
formed in 2002 after government unbundled ZETDC into different companies 
under Zesa.

The Electricity Act ushered in the formation of five successor companies, 
the Zimbabwe Power Company (ZPC), Zimbabwe Electricity Transmission Company 
(Zetco), Zimbabwe Electricity Distribution Company (ZEDC), Zesa Enterprises 
and Powertel Communications.

ZEDC’s business is the distribution and retail of electricity to the final 
end user.

In line with the approved structure, all power generation assets and 
operations are under ZPC.

Zesa Enterprises, another subsidiary of Zesa Holdings comprises of four 
business units namely Zesa Technology Centre, Production and Services, 
Transport Logistics and Projects.

It is a flexible investment arm for Zesa Holdings that has a diversified 
business portfolio.


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