Harare — THE African Development Bank has pledged to release a US$51 million loan to Zimbabwe to be channelled to power utility Zesa Holdings for emergency rehabilitation of key power infrastructure.

An additional US$1,4 million is expected from the European Union.

Against this background, Finance Minister Tendai Biti has made a US$52,4 million provision under vote of credit for power infrastructure.

"Mr Speaker Sir, I am pleased and happy to announce that the African Development Bank has undertaken to avail US$51 million targeting key emergence rehabilitation works of Zesa infrastructure.

"I have therefore made provision of US$52,4 million under the vote of credit for energy infrastructure to cater for energy infrastructure inclusive of US$1,4 million anticipated from the EU," he said, presenting the 2010 National Budget.

Ministry of Finance officials said the AfDB loan was a done deal and would be released by March next year.

"The loan from the African Development Bank is almost certain, it is a done deal and should be released by end of March next year," he said.

Minister Biti said that while acknowledging the positive impact the funding would have on rehabilitation of power infrastructure more funds were required considering the magnitude of work to be done.

Zesa, saddled by about US$500 million external and internal debt, requires an estimated US$385 million for emergency rehabilitation of key generation, transmission and distribution infrastructure.

The country continues to experience intermittent electricity supplies due to old and unreliable infrastructure, as energy production has now fallen way below the national installed capacity.

This also comes amid fears that failure to undertake emergency rehabilitation of infrastructure, especially at the Hwange Thermal Power Plant, could plunge the country into an even serious electricity crisis.

While the country requires heavy investment in new power generation plants recent research findings indicated that rehabilitation of existing infrastructure has much quicker benefits.

"Therefore, it is critical that urgent steps be taken to restore the current infrastructure through rehabilitation and maintenance," said Minister Biti.

In response to critical power shortages the power utility is expected to embark on strict energy efficiency measures including demand side and load management to serve electricity.

This would be supported by improved revenue inflows through cost reflective tariffs and prompt settlement of bills by customers.

The Government has also set aside US$5,5 million for the completion of the Rural Electrification Programme outstanding projects.

This amount includes US$2 million earmarked for end user infrastructure and US$500 000 targeted at installation of solar projects.

Zimbabwe has generating capacity of about 1 960MW of which about 1 000MW of non-firm power generation is available for production. Zimbabwe imports an average of 300MW from the region.