ZESA Holdings plans to securitise $150 million it is owed by customers from $944 million and is engaged in discussion with banks, an official from the power utility has said.
Giving oral evidence before the Parliamentary Portifolio Committee on Mines and Energy, Zesa Holdings chief executive officer Josh Chifamba said the company would be securitising money it is owed by customers who are already on prepaid metres.
“Efforts are underway to discuss with banks to securitise this debt and we will take $150 million from the debtor’s book,” he said.
“We will take the arrangement to the bank. We are in the process to securitise the debt and negotiations with banks are at an advanced stage,” he said.
Securitisation is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations.
Domestic customers owe the utility $322 million, followed by commercial customers ($314 million), mining and industrial ($208 million), farmers ($70 million) and public lightning ($29 million).
Chifamba said included in the domestic debt is $172 million that is being recovered through prepaid metres at a rate of 25% of the purchase amount.
“We have so far installed 429 000 prepaid metres countrywide which is 81% of the targeted 532 000 metres under phase 1,” he said.
Chifamba said the power utility was receiving payments from money owed by customers, but the money was still little as they take 25% of the total amount paid for prepaid electricity.
He said despite the government debt relief extended to customers in October last year, outstanding debt continues to rise.
Zesa Holdings boss said customers were failing to pay due to the prevailing economic challenges, low income levels, perceived high electricity tariffs and the negative attitude towards payment of electricity by most Zimbabweans.
He said the country was facing a 800 megawatt shortfall against a 2 100 megawatt capacity although it is getting 1 960 megawatts due to ageing equipment.
He said Hwange power station’s six units were operational, producing 700 megawatts.Chifamba said the power utility has managed to pay off its $40 million loan to Nampower and was left with fulfilling the power supply obligation for 10 months to meet part of the agreement.
He said the Harare, Munyati and Bulawayo thermal power stations were low-hanging fruits that could be tapped to realise profits for the power sector.