Zesa speaks on 16-hour daily loadshedding Zimbabwe is experiencing, situation to get worse over US$430 million Hwange Unit 7 and 8 debt

0

Zimbabwe is grappling with crippling power cuts, enduring up to 16 hours of loadshedding daily, a situation ZESA Holdings attributes to a confluence of factors. The state-owned power utility has cited a technical fault at the Hwange Thermal Power Station, the country’s largest power plant, as a major contributor to the ongoing crisis.

However, a deeper, more concerning issue threatens to exacerbate the already dire situation: a staggering US$430 million debt owed to Hwange Electricity Supply Company (Hesco).

In a statement released on Wednesday, ZESA acknowledged the reduced electricity generation capacity.

“ZESA Holdings would like to advise its valued stakeholders that the national power grid is currently experiencing reduced electricity generation capacity due to a technical fault at Hwange Power Station. This has been further compounded by low generation capacity at Kariba Power Station, resulting from low water levels. Our technical teams are actively working to resolve the fault at Hwange to minimize the impact on our customers. We sincerely apologize for the inconvenience caused,” the statement read.

The technical fault at Hwange is not an isolated incident. Less than three months ago, Unit 8 at the power station experienced a similar technical fault, leading to further electricity supply shortfalls.

The ageing infrastructure at Hwange, with its 920-megawatt capacity, frequently experiences breakdowns, highlighting the urgent need for modernisation and maintenance. The situation is further complicated by low water levels at the Kariba Power Station, another key source of electricity for the nation, reducing its generating capacity.

In Harare, residents are facing the brunt of the power crisis, enduring up to 20 hours of daily power cuts, with some suburbs experiencing outages lasting over three days. This prolonged lack of electricity is severely disrupting daily life and impacting businesses across the country. The 16-hour daily load shedding has already severely disrupted the economy, according to industrialists and miners.

However, the technical issues at Hwange and Kariba are only part of the problem. An exclusive investigation by the Zimbabwe Independent reveals that ZESA Holdings owes Hesco, the operator of Hwange’s Units 7 and 8, a massive US$430 million. This debt, accumulated from unpaid power supplied between May and November this year, poses a significant threat to the continued operation of these crucial units.

Units 7 and 8, commissioned in 2023 at a cost of US$1.4 billion, contribute a substantial 600 megawatts to Zimbabwe’s national grid. Their construction was funded by a loan from the China Export and Import Bank in 2018. Hesco, a joint venture between the Zimbabwe Power Company (ZPC) and Sinohydro Corporation of China, is now warning of potential operational halts if the debt remains unpaid.

An unnamed official at Sinohydro expressed serious concerns about the situation: “ZETDC owes Hesco around US$430 million. Hesco has no money to pay for operations and maintenance. It also has no money to pay for coal supplies and shareholders.” The official highlighted the potential consequences, stating, “Maybe it will be shut down in the future due to lack of money to fund operations. So far, we have invested hundreds of millions of dollars but the return is zero.”

This debt, which will accumulate interest if left unserviced, casts a significant shadow over the future of these vital power generation units.

The US$430 million debt represents the cost of approximately seven billion kilowatt-hours of electricity generated by Units 7 and 8 and fed into the national grid. Of this amount, Hesco owes Sinohydro Corporation approximately US$330 million, comprising US$300 million for maintenance and operations and a further US$30 million in outstanding payments.

Energy and Power Development Minister Edgar Moyo told the Independent that the ZETDC debt is being addressed by the Mutapa Investment Fund (MIF), established in 2023. However, the scale of the debt and the urgency of the situation raise serious questions about the efficacy of the current strategies to resolve the crisis.


Breaking News via Email

Enter your email address to subscribe to our website and receive notifications of Breaking News by email.