Struggling parastatal, the Zimbabwe Electricity Supply Authority (Zesa) is reported to have written to the government seeking permission to hike electricity tariffs starting from January 2018. This comes after reports that Zesa owes its suppliers, both local and international, almost US$1 billion and if no intervention takes place, Zimbabwe is likely to start experiencing massive load shedding.
In June the Zimbabwe Energy Regulatory Authority(Zera) blocked Zesa from increasing its tariffs by almost 50 percent from 9,86c per kWh to 14,64c per kWh.
An excerpt of a document presented to Energy and Power Development minister Simon Khaya Moyo, which is quoted in The Zimbabwean Independent reads:
Zesa is technically insolvent as its debt has ballooned to US$1 billion. Zesa’s debt to the South African power utility Eskom has ballooned to US$41 million, while it still owes Hydro Cahora Bassa of Mozambique about US$9 million. The country consumes about 1 600MW daily.
The disbursement is crucial in the sense that it supports power supply reliability as the power utility will pay for its imports as well as coal supplies.
An immediate solution is that Zesa can be allowed to increase its tariff to achieve a break even.
These are loans that were used to finance projects in the power sector from multilateral and European banks and the debts are all due.
More: The Independent