13 January 2010

Zimbabwe: Stop Power Exports, Zesa Ordered

Harare — Energy and Power Development Minister Elias Mudzuri has ordered Zesa Holdings to stop electricity exports to Namibia until normal power generation at Hwange Power Station is restored.

Minister Mudzuri wants the deal renegotiated so that only power generated at Hwange Thermal Station is exported to Namibia.

Investigations reveal that Zesa's power station in Hwange was not operating at full throttle due to numerous challenges.

To fulfil a contractual agreement with NamPower, which sponsored refurbishment of the power plant, it was exporting to Namibia energy imported from other countries in the region.

In an interview yesterday, Minister Mudzuri said Zimbabwe was not reneging on its power obligations to Namibia under an agreement entered into between the two countries. Under the agreement, Zesa is supposed to export electricity to NamPower as payment for a US$40 million loan used to refurbish Hwange Thermal Power Station in 2007.

"We can't have a situation where we import to export. In the past, we have never stopped supplying them (Namibia) with electricity even when Hwange was down. This meant we were importing and then re-exporting and I am saying that is not proper," Minister Mudzuri said.

He said Zesa should be able to advise its Namibian counterparts when it is not in a position to supply them with electricity.

"That deal was for Hwange only and Zesa should be able to say to them 'We cannot supply you with electricity if Hwange is down'. We have to give them electricity from Hwange," he said.

Under the deal, Zesa is supposed to export 150 megawatts to Namibia as repayment of the loan for a minimum of five years.

The power utility has, however, been continuing with exports to Namibia despite the problems being encountered at Hwange, while load-shedding has also increased locally.

The power station has not been operating at full capacity since the end of 2009 and this has resulted in increased load-shedding countrywide.

The shortfall has been offset by imports from other power utilities in the region that include Hidroelectrica de Cabora Bassa of Mozambique, SNEL in the Democratic Republic of Congo and South Africa's Eskom.

Zesa has also been crippled by non-payment of bills and is currently owed over US$200 million by its customers.

The power utility was allocated US$52,6 million in the 2010 National Budget to rehabilitate its aged infrastructure.

Zimbabwe has been facing a shortage of electricity that worsened in the past five years because of obsolete equipment and erratic coal supplies from Hwange Colliery Company.

Hwange is also operating at below capacity.

Zimbabwe requires approximately 1 900MW of electricity, but the two main power plants -- Hwange Thermal Power Station and Kariba Hydro Electric Power Station -- have been operating below capacity and are producing an average of 1 200MW, leaving a deficit of 700MW.

Hwange Power Station produces 900MW when operating at optimum capacity while Kariba produces 750MW.

Zimbabwe has signed another power deal worth US$10 million with Botswana for the refurbishment of Bulawayo Power Station.

The station has a capacity to produce 90MW and the country will export 40MW to Botswana for three years to repay the loan.

The two countries have also agreed to identify energy projects they can jointly develop.

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