Power utility ZESA is feeling the pinch of a hefty import bill of US$250mn annually amid calls for a comprehensive strategy to effectively deal with crippling load shedding that is inflicting miseries on residents, commercial and industrial consumers.
The majority of businesses have been forced to use backup diesel generators because of the rolling power outages, which are expensive to operate.
ZESA Holdings’ power generation unit,the Zimbabwe Power Company, produces about 1 000 megawatts per day , against a national demand of about 1 800MW. To cover for the shortfall, State-owned power utility, ZESA, imports from South Africa’s power utility Eskom, Hydro Cahora Bassa of Mozambique, and from Zambia. ZESA entered into non-firm contracts with the regional power utilities, meaning they can only supply electricity if they have surplus.
Company executive chairman Sydney Gata said the company was spending much on power imports adding there was a need to address the issue by implementing strategies that ease power shortages.
Speaking during the signing of an MoU between ZESA Enterprises and Dinson Iron and Steel Company, Gata said the company was spending too much on power imports.
“We are spending too much,” Gata said.
“In one year we spent a quarter of a billion dollars but I am pleased to say that our government is aware of the challenges and we are working on initiatives that will bring an end to our challenges,” he said.
Observers say amid the challenges, despite ramping up production at the Hwange Power Station, ZESA is also affected by climate change and had to reduce generation in Kariba from an average of 800 megawatts (MW) to 300 a day.
Zimbabwe, under the circumstances, will have to import power like many other countries in the region.
ZESA is also reeling from a ZWL$150bn debtors book that is also affecting ability to meet demand with local authorities owing the biggest chunk.
ZESA is faced with a cocktail of challenges that has seen incessant power cuts across the country affecting residents and business.
This has seen the company hamstrung and failing to provide power to millions of Zimbabweans and businesses. On the deal with Dinson Iron and Steel Company, a Chinese firm involved in the construction of a US$1.5bn steel manufacturing plant in Manhize near Mvuma in Mashonaland East province, the ZESA executive chairman described the project as a “game-changer.”
“There is a lot of engineering capacity resident here in terms of the expertise, in terms of the machinery and technical capacity,” Gata said.
“In terms of the agreement, we will provide steel products for use in infrastructure with the most notable being transmission towers and steel used for power transmission infrastructure. We have been importing this from China, Japan, India and sometimes also from South Africa. We will make them here in Zimbabwe and we are grateful with this game-changer.”
“Steel is a major part of transformation for any economy for the good of the nation as a whole.”
ZESA Enterprises Managing Director Godfrey Mugaviri signed on behalf of the power utility.
Dinson Iron and Steel company chairman Benson Xu said electricity and steel were key in realising the government vision hence excitement on their partnership with ZESA.
“To me the most important things are steel and power, that is electricity. Without electricity and steel, there is no vision to talk about. Vision 2030 mainly talk of industrialisation and it is all about power and steel at the end of the day,” he said.
“I am happy our company is part of the journey to achieve that. I am happy we are strengthening relations between Zesa Enterprises to achieve the targets of that vision together.”