Mining Companies Owe ZESA US$37m

By Alois Vinga

MINING companies owe the Zimbabwe Electricity Supply Authority (ZESA) money running into millions of dollars which is partly choking the power utility’s capacity to improve efficiency.

Speaking to delegates at a function held to launch the 2021 State of the Mining Industry Report, ZESA engineer, Howard Choga confirmed the details

“Currently, mining sector companies owe the power utility a total US$37 million and $400 billion in local currency. The money owed is in operating payment plans, that’s how we have arrived at the balance. Those not paid up will be switched off. Our collection rate ranges from 106% to 110%. We are also grateful for the support we are receiving from international institutions,” Choga said.

Choga blamed the negative impact of retention thresholds set by the Reserve Bank of Zimbabwe (RBZ) as a limiting factor deterring companies from paying the outstanding amounts.

“The 60% foreign currency being received by companies is not enough to enable settling of the electricity bills in foreign currency. There is, therefore, a need to increase the thresholds going forward,” he said.

The ZESA official pleaded with the central bank to avail more foreign currency to enable timely power imports and curb outages bedeviling industry.

He projected that going forward, the demand for electricity is likely to keep increasing from the current need structure of 2 030 megawatts to 4 143 Mega Watts by 2030.

But speaking at the same occasion, RBZ governor John Mangudya urged the power utility to first prioritise collection of owed amounts before considering tariff hikes.

“Collection of what is owed will cut back the burden of Non- Performing Loans and unlock more resources before increasing tariffs. The use of pre-paid meters will also go a long way to avoid further increases of such debts. Over and above, our doors remain open for negotiations on the requests made,” he said.