By Tatenda Dewa | Harare Bureau |
The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) is saddled with a whopping $1.3 billion debt that could undermine its ability to supply power to the nation.
Zimbabwe has for months enjoyed steady supplies of electricity after government managed agreements with suppliers.
ZETDC, according to local independent media reports, owes creditors some $987 million, while it is grappling with loans amounting to $330 million.
Power suppliers who are owed around $734 million are said to have threatened to stop giving electricity to the company.
On the other hand, ZETDC is owed around $1,075 billion by consumers, mostly parastatals, local authorities and private companies.
The Zimbabwe Electricity Supply Authority under which ZETDC falls is currently battling to recover the money it is owed through legal means.
The ZETDC managing director, Julian Chinembiri, recently acknowledged that the power distribution company had become insolvent.
Among other suppliers, it is getting supplies from the controversial Dema plant in which President Robert Mugabe’s son-in-law’s brother, Derrick Chikore is a said to be a shareholder at an exorbitant 15,04c/kWh.
“We are technically insolvent as a company,” Chinembiri said at a workshop last week.
“We thought we will turnaround the company, especially when we were going to be awarded the tariff (increase). The company will require financial bailout in the near future, but (not sure) from where because the fiscus does not have money,” he added.
Zimbabwe is currently importing power from Mozambique, South Africa and Zambia.
ZETDC owes Eskom US$8,8 million although the parties have a prepayment arrangement. As a result, Eskom is supplying ZETDC with 50 megawatts instead of the agreed 100 megawatts.
The currently is generating about 1,000 megawatts through the Kariba power station and smaller utilities but that is well below national demands. Nehanda Radio