Zimbabwe Power Utility Demands Dollar Payments to Pay Bills

By Godfrey Marawanyika

VICTORIA FALLS – The Zimbabwe Electricity Supply Authority will ask mining companies and other exporters to pay part of their power bills in foreign currency to help the utility cover import costs.

ZESA introduced daily outages for the first time in three years this month after a drought crimped hydropower output, exacerbating breakdowns at its aging power plants. ZESA only has the capacity to meet about two-thirds of the demand for electricity in Zimbabwe and is considering increasing imports from neighboring South Africa and Mozambique to supplement output.

The authorities are drafting legislation on the payments, ZESA acting chief executive officer Patrick Chivaura said in an interview Wednesday.

The utility currently receives all payments in RTGS dollars, the country’s de facto currency.
“We are supplying mining companies and exporters with power, but they are paying in local currency, yet we pay for our spare parts in foreign exchange,” he said.

Chivaura declined to say what proportion of payments would be in domestic and foreign currency.

The payment requirement will place further strain on mining companies grappling with a shortage of hard currency that has forced some of them to suspend operations this year.

“Mining companies have begun discussions with ZESA about the proposal,” said Batirai Manhando, the outgoing president of the Chamber of Mines, an industry lobby group.

“If this is adopted without proper consultations, a number of them will close,” he said. “Already, some in the sector are paying for power in US dollars and this is not sustainable at all.”

ZESA owes regional suppliers more than $80 million, including $33 million to South Africa’s Eskom Holdings SOC Ltd and $35 million to Mozambique’s Hidroelectrica de Cahora Bassa – Bloomberg