HomeNewsZesa, HCB in debt talks

Zesa, HCB in debt talks

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Zesa Holdings say they are negotiating with Mozambique’s Hidroeléctrica de Cahora Bassa (HCB) with a view to come up with a payment plan to settle debts estimated at $5 million.

HCB supplies Zesa with 500 megawatts to compliment the power utlity’s generating capacity.

Zesa spokesperson Fullard Gwasira yesterday said the country had a cordial relationship with HCB.

“We have since committed to a payment plan in order to amortise what we owe and we have since improved on the quality of our bills and intensified on credit control measures in mitigation,” said Gwasira

He said there was a direct link between the country’s debt to HCB and the customer record of payments to Zesa.

“We will thus not hesitate to withdraw supplies to those customers who are unwilling to settle their debts or enter into a payment plan with us,” said Gwasira.

He said the power utility required an injection of fresh capital in order to establish new generation assets.

Gwasira added the challenge of demand-supply mismatch was a result of an increase in the demand for electricity, obsolete equipment. Poor tariff and poor working capital have adversely affected investment in new generation projects.

“Investors have been lukewarm to the power sector due to sub-economic tariffs, vis-a-vis the rate of return from the region,” he said.

“There is a strong need for consumers to support the tariff among other things in the interests of greater viability in the sector,” said Gwasira.

Gwasira said Zesa Holdings was in no position to comment on the decision of the privatisation as it was an issue that rests with shareholders to decide on the business model for the power utility.

The power utility said the Electricity Act provides for private investment in the sector, but: “Unfortunately, due to the poor tariff, IPP’s have obtained generation licenses which have not yet yielded new generation assets.”

Zesa said it plans to install smart prepaid meters and is waiting for the finalisation of the engagement of a service provider for smart prepaid meters by the State Procurement Board to empower customers to manage their own consumption.

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