Home Economy Afreximbank to clear Zimbabwe’s power utility’s $70m debt arrears

Afreximbank to clear Zimbabwe’s power utility’s $70m debt arrears

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Zimbabwe’s state electricity utility is having negotiations with the African Export–Import Bank (Afreximbank) to help clear $70 million (about R1 billion) of arrears it owes the power producers in South Africa and Mozambique.

The Zimbabwe Electricity Supply Authority (Zesa) Holdings has to pay the debt to avoid having the supplies cut off. Zimbabwe depends on imports because of the old plants and a drought-induced hydro-power shortage that have left the country unable to produce enough energy to meet the needs.

Zesa owes money to Mozambique’s Electricidade de Mocambique and Hidroelectrica de Cahora Bassa.

“We are in the process of finalising a financing arrangement,” Zesa CEO Patrick Chivaura stated. “We have made great progress in settling our regional suppliers but we still owe them about $70 million.”

Afreximbank regional CEO Humphrey Nwugo so far has not responded to an e-mailed request for a comment.

According to Chivaura, Zesa honours the agreement made in August to pay Eskom $4 million a month. The agreement allowed Zesa to draw as much as 400MW of power from Eskom in terms of a non-binding contract, he said.

“The other plan which we have put into motion is to firm up our imports from the region,” he explained. “Zesa expects Eskom to respond by the end of January to its request for a binding commitment to supply power.”

Eskom itself is struggling to keep the power in South Africa. The state-owned company faces more than R450 billion of debt, declining revenue and aging plants.

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