10 January 2008
Maputo — Mozambique's Cahora Bassa dam has interrupted supplies of electricity to the Zimbabwean power facility, ZESA, for non-payment of bills.
A senior source in the dam operating company, Hidroelectrrica de Cahora Bassa (HCB) told AIM on Thursday that resumption of the power supply to Zimbabwe is dependent on ZESA paying in full a debt of 10 million US dollars.
HCB gave ZESA a serious warning of its intent when, in mid-December, it reduced supplies to Zimbabwe from 150 to 75 megawatts. ZESA still did not pay the debt, and so, on 28 December, the flow of all HCB power to Zimbabwe was interrupted.
AIM's source added that, "as a humane gesture" the power supply was reconnected on New Year's Eve. But, despite promises from ZESA, no money was forthcoming, and so on 1 January HCB once again disconnected Zimbabwe.
Subsequently, ZESA was able to scrape together seven million dollars. This was not enough: HCB insists on the full 10 million dollars before resuming electricity supplies to ZESA. AIM's source was optimistic that the money would indeed be paid later on Thursday, or possibly on Friday.
According to a second HCB official, Juliao Pondeca, advisor to the Board of Directors on Strategic and Commercial Development, the company is in daily contact with ZESA, which is in turn in permanent contact with its Zimbabwean industrial clients (some of whom have expressed a willingness to pay in hard currency for guaranteed Cahora Bassa power).
Pondeca said that, as of Thursday, HCB's overdue debt stood at 18.7 million dollars, and a further four million dollars will fall due by the end of this month. "As soon as ten million dollars is paid we shall switch the power back on, and then we shall talk about the rest of the debt", said Pondeca.
Pondeca said ZESA had the habit of promising to pay "tomorrow", but when tomorrow came, the money didn't. "Unfortunately, failure to pay has brought us to this situation", he added, stressing that HCB could not allow the ZESA debt to become unsustainable.
"ZESA is a very important client for us", he said. "It's a strategic client, but this is just a question of regulation".
The disconnection comes as an unwelcome reminder to ZESA that, even though HCB is now run by Mozambique, rather than by Portugal, it is still a commercial enterprise, and not a charity. Indeed, the signs are that the new Mozambican management of HCB is taking a tougher line on payment than the old Portuguese management did.
Mozambique acquired a majority stake in HCB on 27 November, when payment of 700 million dollars to Portugal for 67 per cent of the HCB shares was finalized. This brought the Mozambican state's holding in HCB to 85 per cent, while the Portuguese holding shrank to 15 per cent.
The Mozambican government borrowed the 700 million dollars from a consortium of French and Portuguese banks. The banks will be repaid out of sales of Cahora Bassa electricity - and this is an arrangement that will only work, if HCB's clients honour their commitments and pay up on time.
The ZESA Chief Executive Officer, Ben Rafemoyo, cited by the independent Zimbabwean news agency Zimonline, admitted that HCB had cut supplies. His candour contrasts with the disinformation in the state-owned daily paper "The Herald" which has repeatedly stated in recent editions that Zimbabwe is still receiving 75 megawatts from HCB, when in reality the country has not received a drop of HCB power since 1 January.
Rafemoyo told Zimonline "We are trying to catch up with the ballooning debt. HCB is insisting that we clear what we owe them".
ZESA's problem is that Zimbabwe only generates around 1.500 megawatts, but consumption is 2,200 megawatts. The gap has traditionally been met by imports - but not only HCB, but also Zambia and the Democratic Republic of Congo have suspended exports of power to Zimbabwe because of debt.
The South African electricity company Eskom has demanded payment up front from ZESA - but even if ZESA could pay, currently Eskom does not have the spare capacity to export power to Zimbabwe, since it is chronically short of power for its South African clients.
The result is enormous power cuts in Zimbabwe. ZESA has been withholding power from domestic consumers for up to 20 hours a day, to ensure that electricity goes to key industries.
ZESA is also plagued with ageing equipment and severe maintenance problems, notably at the Hwange coal-fired power station. The torrential rains that Zimbabwe has been experienced over the past few weeks mean that the coal is wet. It can only be burnt properly by firing it first with diesel - and ZESA is running out of diesel.
So desperate is ZESA's situation, that it now wants to bring back into production three small coal fired stations that were mothballed years ago because of coal shortages.
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