Government prevents potential electricity crisis by bailing out Zesa

6 years ago
Sun, 16 Oct 2016 23:52:00 GMT
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Government prevents potential electricity crisis by bailing out Zesa

Government has prevented a potential electricity crisis by issuing a R500 million ($35 million) guarantee to South Africa’s power utility, Eskom to back up power imports from the neighbouring country. Eskom, which supplies Zesa Holdings with 300 megawatts, recently wrote to the power utility threatening to cut supplies over a $12 million debt.

Sources interviewed by The Chronicle yesterday said the guarantee to Eskom was issued last week,

A looming disaster has been averted, but that does not mean Zesa has to relax because still the debt has to cleared. In the event that Zesa fails to pay, Eskom will simply call up the guarantee and Government will have to pay the money. This is a burden if Zesa does not pay up. Because in the national budget, that guarantee is not factored in, it means something budgeted for will have to suffer. Legally, Government is saying I am standing behind Zesa.

Zesa also owes Mozambique’s Hydro Cahora Bassa $10 million. Zesa chief executive Engineer Josh Chifamba yesterday declined to comment on the guarantee, referring questions to the Ministry of Energy and Power Development. He, however, said the power utility was putting in place measures to avoid load shedding,

We are working hard to ensure there won’t be any load shedding. We are going to be talking this coming week with our customers who are into exports with a view to see if they can give us part of their allocation such that we have foreign currency and are able to pay for power imports.

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