$1bn debt cripples Zesa operations at Hwange, Munyati

ZESA Holdings says the much-needed plant maintenance works at Munyati and Hwange power stations are severely being hampered by consumers’ failure to service their debts.

by Blessed Mhlanga

Sources within the company said Munyati Power Station was struggling to get critical spares needed for a refurbishment exercise due to cash flow challenges.

Zesa spokesperson Fullard Gwasira confirmed the power utility was owed $1,022 billion.

“The Sadc region collectively is having a deficit in power supply to meet the growing demand in the respective economies. For Zimbabwe, the ability to import power when available is linked to the consistent payment of bills by customers. Currently, the consolidated debt of all categories of customers is $1,022 billion,” Gwasira said.

Zesa has now engaged lawyers, among them Masawi and Partners, who have over the past months dragged the country’ sole ammonium nitrate fertiliser manufacturer, Sable Chemicals, to court over a $150 million electricity debt.


Gwasira said Zesa continued to engage all its debtors in an attempt to improve its fiscal space and ability to deliver service.

“Stringent debt recovery efforts are being done for all customers owing and domestic customers are liquidating the debt through the 40% pre-paid purchase deductions. Other customers are having payment plans in place to settle their debts. Industry is owing only 17% and domestic is at 32%,” he said.

Gwasira, however, refused to name and shame the big companies and prominent individuals owing Zesa huge amounts of money.

“All customer categories owe varying amounts and to single out one sector from the others as being a major debtor defeats the progressive drive to collect revenue as the power utility is guided by the principle of constructive engagement than naming and shaming its customers. We expect all customers who have payment plans to honour them to have the debt reduced,” he said.

Industry players have accused Zesa of now preferring to supply electricity to domestic consumers, who are on the prepaid platform, a move they allege was pushing costs of production upwards.

“The productive sector of the economy has always been given preferential treatment in order to bring in revenue to the fiscus for national economic development. Domestic consumers have borne the brunt of load-shedding during the extreme power shortage period between August and November 2015,” Gwasira said.

Zesa Holdings has its own fair share of debts and has been taken to court by some of its creditors, who accuse the power utility of deliberately failing to pay its debts.

Gwasira said the power utility was facing the same economic challenges as everyone else and was engaging its creditors to find common ground.

“There are challenges that are affecting various players, Zesa Holdings included, in the economy as liquidity is constrained.
We have been constructively engaging all our creditors and making arrangements for settlement, which arrangements are subject to parties’ confidentiality agreements,” he said.

“Should there be any litigations being preferred against Zesa by any creditor, it is, therefore, sub judice (under judicial consideration) to comment on any matter that is before the courts. “

Gwasira added: “The Zesa creditors vary from banks to ordinary suppliers and all have different agreements, which are being managed and honoured as per the terms of contract. We are able to settle the current creditors with Zesa, as we make progress to collect what we are owed by our customers and from our sales.”

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