ZPC faces cash flow problems, owed $540mln by ZETDC

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THE Zimbabwe Power Company (ZPC) says it is facing cash flow problems attributed to a debt of $540 million owed by its sister electricity distribution firm ZEDTC, which it expects to recover from improved revenues due to the prepaid electricity system.
ZPC managing director Noah Gwariro said the company faced a myriad of problems during the first quarter of this year, including external grid disturbances resulting in 34 power trips and cash flow challenges.
“We do have cash flow constraints. We believe that with the solution that ZEDTC has put in place through prepaid meters we will get paid. The consumer capacity to pay is also dependent on the performance of the economy,” he told journalists during a media briefing on Thursday.
Gwariro said ZPC was owed over $540 million by the Zimbabwe Electricity Transmission and Distribution Company and has, in turn, debts amounting $99 million.
Both companies are subsidiaries of ZESA Holdings.
At the beginning of the year ZEDTC said installation of  prepaid metres was 98 percent complete after installing 524,000 out of the 532,000 metres (by last December) and expected to complete the project during the first quarter.
Zimbabwe is in the grip of perennial electricity shortages due to the diminished generating capacity of its ageing plants and lack of investment in new infrastructure. The country currently generates half of its 2,200 megawatt peak demand.
The introduction of prepaid electricity platform in 2012 is an important demand-side management measure meant to guarantee revenue streams as users pay for power in advance, while also managing their consumption better.
Gwariro said the company had embarked on power generating projects at a cost of $5 billion which will add 3,500MW to the national grid in the next six years.
This year alone ZPC increased the power sent out by five percent to 9,783GWh compared to 2014.
He said Kariba contributed 51 percent of power to the national grid, Hwange whose equipment is antiquated and requires $600 million to extend its life is contributing 30 percent. Imports account 13 percent while small thermal power stations contribute six percent.
On the Kariba South expansion programme, Gwariro said civil works were currently underway, with three out of the six access points to the dam wall completed while the fourth one is nearly through.Advertisement

“Now we are able to work on the power house and the pilot tunnel is 48,9 percent complete,” he said.
The expansion of Hwange Thermal Power Station and the construction of its units 7 and 8, which was awarded to China’s Sino Hydro, is also underway with the route survey and site layout having been carried out for the power line to be installed.
Upgrading of boilers at Harare Power Station at a cost of $70,2 million will be completed in 20 months, adding 60MW and total capacity at 120MW.
Gwariro said plans were also underway to put up a 120MW diesel/gas plant in Mutare and that the project was currently under adjudication after eight bidders expressed interest. Adjudication will be completed at the end of May.
Other projects such as Batoka project with Zambia through which Zimbabwe will get 800MW is still underway with a feasibility study underway.
A solar project to add 300MW to the national grid is in the process of adjudication after four out of the six bidders were selected and the project is expected to be completed by June.
“Bigger machines running on diesel will power the plant and it’s cheaper than the diesel consumed by individual households,” he said, adding that South Africa had over 1000MW diesel power which reduced shortages.