Zimbabwe News and Internet Radio

NamPower in the dark over Zesa deal

By Nyasha Francis Nyaungwa

WINDHOEK – Confusion surrounds the extension of the controversial power purchase agreement between NamPower and Zimbabwean power utility, ZESA. 

Energy Minister Elton Mangoma Behind the Headlines
Energy Minister Elton Mangoma

NamPower MD, Paulinus Shilamba announced this week that a 2007 power purchase agreement signed between the two power utilities which was coming to an end in October this year, has been extended by another year to the end of 2014.

Shilamba’s announcement come days after the Zimbabwean Energy minister, Elton Mangoma was quoted in a Zimbabwean weekly, the Independent saying the agreement, which was initially scheduled to end last year, will be terminated in October this year and will reduce that country’s power deficit understood to be around 800MW.

Mangoma was quoted as saying: “The power purchase agreement is for 150MW so you can see it’s a lot of power which when that contract terminates we will be able to have another 100 to 150MW supplied to the country.

“What they (NamPower) have done is to ask us to sign a power purchase agreement which is a lot more than the amount that they have given us. For instance, we have got a contract that says we should be able to export power which sometimes is in the region of US$4 to US$5 million a month to them.

“As you can see if we were just repaying with electricity we could have just taken ten months or one year and finished it, but they instead actually pay us for that electricity or a portion of it until the end of the power purchase agreement which is in October.”

Briefing journalists on the electricity supply situation in the country on Tuesday, the NamPower MD declined to give details of the new deal citing confidentiality agreements between the two parties.

In 2007 NamPower entered into a power purchase agreement with Zimbabwean power utility in which NamPower injected US$40 million into the rehabilitation of the Hwange thermal power station in return for 150 megawatts of power for five years.

An outcry in both countries over the rationality of the agreement had threatened the agreement and any future renewals.

In fact in 2010, the then Zimbabwean Energy Minister, Elias Mudzuri said that Zimbabwe should stop exporting electricity to Namibia until the Hwange Power Station was producing enough electricity. Namibia Economist