GOVERNMENT is in talks with creditors to reduce close to $500 million Zesa Holdings legacy debt which is one of the company’s major challenges.
Business Reporter
The debt was accumulated before the unbundling of the company in 2002.
The parastatal has four subsidiaries — Zimbabwe Power Company, Zimbabwe Electricity transmission and Distribution Company, Zesa Enterprises and Powertel Communications.
Speaking before the Parliamentary Portfolio Committee on State Enterprises and Parastatals last week, Zesa chief executive officer Josh Chifamba said the company had a legacy debt of $500 million from creditors that it is trying to service.
“We have a debt that is under $500 million that we need to honour. We approached government to create a special purpose vehicle or offer a guarantee. The Finance minister Tendai Biti has said he will approach them on our behalf and he is already doing it,” Chifamba said.
Chifamba said the power utility company had so far managed to clear some of its debts that include the $100 million owed to Hydro Cahora Bassa and also part of the $40 million that it owes NamPower.
He said from the Nampower loan, $6,9 million was outstanding.
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The power utility expects to pay an additional $20 million to Zambia for the debt that was valued at $70,8 million.
“We have paid $20 million so far and will be paying an additional $20 million to Zambia by the end of March. We hope it will be cleared by March next year,” he said.
Chifamba said the debt had attracted a $115 million interest. The power utility was owed $740 million by customers in the country with Sable Chemicals being among the top debtors. Local authorities owe the power utility $265 milion.
Chifamba said Zesa was facing challenges in accessing long-term finance that is required for the power projects. Zesa is currently rolling out prepaid meters to customers and they expect to reach out to 650 000 customers.
