Zimbabwe energy minister in SA, pinning hopes on Eskom’s help
Last month, Zimbabwe paid R140m of the R462m it owes Eskom
Harare — Zimbabwe’s energy minister Fortune Chasi is in SA to negotiate for urgent power supply from Eskom, as companies in his country are closing or scaling down operations due to severe load-shedding.
Zimbabwe is facing acute power shortages with blackouts of up to 18 hours a day as a result of low power generation at the Kariba hydro-plant, obsolete equipment at its thermal power stations, as well as rampant corruption that has stunted development of new power projects.
This week, several companies raised alarm over the power cuts with the country’s largest mobile operator Econet warning of “drastic measures” if blackouts persist. Econet is central to Zimbabwe’s economy as most of the local commercial transaction are done via its EcoCash platform.
Information minister Monica Mutsvangwa said on Wednesday that her energy counterpart has been dispatched to SA for crunch negotiations with Eskom. “The minister of energy and power development is currently in SA for the negotiation of supply of electricity from Eskom. The nation will be apprised of the outcome of the negotiations.”
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Zimbabwe has previously imported up to 450MW from Eskom but this arrangement was stopped when Harare defaulted on servicing its debt. It currently needs more than 600MW of power to meet its requirements.
Last month, Zimbabwe paid R140m of the R462m it owes Eskom with a view to having power imports from SA resumed.
The Zimbabwe Electricity Supply Authority’s (Zesa) international debt from power imports stands at R1.12bn, with R490m owed to Mozambique’s Cahora Bassa Hydroelectric company.
Earlier in July, President Cyril Ramaphosa agreed to assist Zimbabwe with solving its power challenges after meeting his counterpart Emmerson Mnangagwa on the sidelines of the African Continental Free Trade Area summit in Niger. After the meeting, Ramaphosa told journalists he was willing to assist Zimbabwe and would engage Eskom.
“[The country] would obviously like SA to support [it, and] it has also been able to pay up the debt owed to Eskom; [President Mnangagwa] confirmed that and he said they would obviously like further support,” said Ramaphosa.
“This is the type of thing we are going to discuss with Eskom because we have always exported energy to Zimbabwe and, indeed, to other neighbouring countries, so the fortunes of Eskom and the fortunes of energy in SADC are intricately linked with our own fortunes.”
Mutsvangwa said the Zimbabwean cabinet had formed an inter-ministerial committee that includes the ministries of mines, finance, agriculture, tourism, ICT and information to assist the energy minister with finding solutions to the power crisis.
Speaking at the same meeting, acting energy minister Sekai Nzenza acknowledged the challenges faced by companies saying the country was pinning all its hopes on Eskom. “We are aware of these companies and we are hoping that when the minister of energy does return, at the end of the week, [there will be] some positive movements to help us alleviate the current situation.”
This week, several companies sent out an urgent appeal to the Zimbabwe government to resolve the power crisis.
On Wednesday, Chinese tile manufacturer Sunny Yi Feng, one of the largest new investors in the country in 2019, implored the government to address the power crisis. “Our operations have been hard-hit by the rolling power cuts, which have damaged machinery and increased the cost of production. We need 18,000l of diesel per day [for generators].”
Another company, Surface Wilmar, said it had sent home 300 workers and was on the verge of shutting down after the power cuts severely hampered production.
Also on Wednesday, the country’s beverage manufacturer Delta, said consumption of beer had declined by 57% from the previous quarter, while that of sparkling beverages went down by 79%. It attributed the slump in performance to the country’s economic meltdown.
“The macro-economic challenges have led to a surge in inflation and a fast-depreciating exchange rate, which has resulted in erosion of disposable incomes and reduced consumer spending,” Delta stated in a trading update.
Zimbabwe is experiencing its worst economic crisis in a decade with inflation pegged at more than 175% in June.