Engineer Chifamba

Business Reporter
ZESA Holdings is in negotiations with an unnamed regional power supplier to import about 250 megawatts while more than $1 billion will be spent on improving generation capacity and infrastructure development.

ZESA has been in a discussions with Hydro Cahora Bassa of Mozambique in which the two companies are expected to tie up a purchase agreement for the supply of 100 megawatts. Mozambique has been exporting 50 megawatts to Zimbabwe on a non-firm contract.

ZESA Holdings chief executive Engineer Josh Chifamba told the Parliamentary Portfolio Committee on Mines and Energy said negotiations are at an advanced stage to secure another power import deal.

“We may be able to get additional power from one of the regional suppliers to the tune of about 250 megawatts and I am saying with caution because we are still to reach an agreement. We are at an advanced stages in terms of discussions on the issue.

“I cannot reveal the identity of the supplier but I am quite sure the deal will be finalised soon,” said Engineer Chifamba.

He said for the year 2015 ZESA will spend money on improving generation capacity and infrastructure development through using internal resources and external sources.

ZESA has already made some headway in its generation development plans. The expansion of the Kariba Power Station by 300MW was in progress, and negotiations to expand Hwange by 600MW were taking place.

Plant rehabilitation and upgrades were also underway where ZESA had begun to upgrade the distribution network and strengthening the grid.

“We are looking at spending $1,047 billion and we made a request to Government for some money and on the $1,047 billion of the funding we will only be able to use our own finances of about $143 million and the remainder, which is about $872 million, will be sourced from external sources,” said Engineer Chifamba.

“We had sought from the fiscus this year to the tune of about $14 million which was to fund ZPC and ZETDC, what was actually allocated this year is $7 million. Of that total requirement we hope to close the gap through sources like the China EximBank and local banks,” he said.

Engineer Chifamba said in the course of 2013, ZESA issued some bonds but the subscription rate was disappointing.

He said IDBZ has, however, issued additional bonds for infrastructure projects at ZESA and there was hope that all the planned projects would soon take off.

“So we are thankful though we may not be getting some funds directly from the fiscus but we are thankful of the guarantee of some of the loans that we are getting,” said Engineer Chifamba.

He said efforts by ZESA to raise funding for Hwange and the Kariba South expansion were already underway and will be expected to come on stream in March 2018.

“We are hopeful that after signing the Hwange contract which is $1,5 billion contract, ZPC will have funds and we have set the challenge to ourselves to be able to do the project in six months. Right now we have three to fourth months to go before that can happen.”

He said the company’s smart meter initiative was improving its credit rating and more banks had begun to show interest in lending money to the power utility.

He said ZESA’s thrust is to restore investment credit rating and prepaid meters had provided a very good platform for that.

“ZESA has had to rely on its own resources as well as borrowing, but as we all know our financial market is not performing very well to sustain our financial requirements,” said Engineer Chifamba.