Cyril Ramphosa. KIM LUDBROOK EPA-EFE File
Cyril Ramphosa. KIM LUDBROOK EPA-EFE File

Zim hopes to see the light after power talks with Ramaphosa

By Tawanda Karombo Time of article published Jul 9, 2019

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Zimbabwe is looking to South African power utility Eskom to help end a crippling and nationwide power deficit.

President Emerson Mnangagwa is hoping to capitalise on his bilateral relations with President Cyril Ramaphosa to influence a new power import deal, which might be curtailed by a $23 million (R325m) outstanding payment for previous electricity supplies.

Eskom last week confirmed receiving a $10m payment from Zimbabwe but also stated that it continued to engage the Zimbabwe Electricity Supply Authority (Zesa) “to find a mutually beneficial solution to the outstanding debt”.

Future arrangements “will be guided by the contracts” already in place between the two power utilities.

The power deficits gripping Zimbabwe have been necessitated by failure to raise foreign currency to pay Eskom and Mozambique's hydroelectric power plant Cahora Bassa, which also exports electricity to Zimbabwe.

The country's power generating infrastructure is aged and frequently breaks down, while water levels at Kariba have dropped sharply.

Faced with this and growing public outrage over a power supply saga which has seen outages of up to 15 hours, Mnangagwa has turned to Ramaphosa for some influence as Zimbabwe battles to restore normal power supplies.

“With Ramaphosa we met and were sharing challenges we are facing and, in particular energy shortages,” Zimbabwe state media quoted Mnangagwa as saying yesterday.

“We exchanged views on how we can deal with that issue,” added Mnangagwa, after the meeting with Ramaphosa on the sidelines of an extraordinary session of the AU on Sunday.

This included the crafting of a new power supply deal from Eskom. Zimbabwe Energy Minister Fortune Chasi is expected to travel to South Africa in the coming week to kick-start negotiations on a new deal to offset the Zimbabwean power crunch.

Payment of the $10m to Eskom last week was also aimed at enabling the two utilities to start working towards a new deal.

“Our Zesa owes Eskom quite a lot of money and they have been able to pay $10m last week to reduce that debt. This enables them to have discussions and I think our minister of energy will go to South Africa next week to discuss some new arrangements,” added Mnangagwa.

News agencies quoted Chasi saying yesterday that Zimbabwe would seek to import as much as 400MW from Eskom with the expectation that this would go a “long way in helping the power situation”. Under previous arrangements, Zimbabwe was getting as much as 300MW from Eskom and another 300MW from Mozambique.

Sources in Zimbabwe have said Treasury and the central bank's attention has shifted to addressing the power supply situation, with letter of credit facilities likely to be approved to speedily settle the Eskom outstanding debt. This would enable Chasi to engage Eskom for a new deal on a clean sheet.

“The attention of Treasury and the reserve bank is now on the power supply in terms of allowing Zesa to have a deal in place to enable it to work on sustainable solutions. After facilitating some payments for fuel imports last week, some facilities are being raised to pay Eskom some more money,” said a top government official.

The longer-term solutions lie in renewable energy and tapping into independent power producers which have, however, been dogged by corruption and slow delivery despite advancements of funds by Zesa. Chasi is now cracking the whip on the Zimbabwe Energy Regulatory Authority to cancel licences for lagging IPPs.

“We cannot have a long list of licences which are not productive,” Chasi said at the weekend.


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