Zimbabwe requires at least US$14m per month to meet power deficit - CEO
Zimbabwe requires at least US$14m a month to meet its 600MW power deficit, acting chief executive officer of the country's power utility Patrick Chivaura said Monday.
Zimbabwean president Emmerson Mnangagwa has since engaged his South African counterpart President Cyril Ramaphosa for help.
The two met over the weekend in Niamey, Niger. They "exchanged views" on how to deal with the issues of the power deficit in the southern African country, according to Mnangagwa.
"Of course, our ZESA owes Eskom quite a lot of money and they have been able to pay US$10m last week to reduce that debt.
"This enables them to have discussions and I think our Minister of Energy will go to South Africa next week (this week) to discuss some new arrangements," said Mnangagwa.
Chivaura said Zimbabwe needs at least 600MW to meet its power deficit which has seen power cuts of between 16 and 19 hours a day.
According to authorities in Zimbabwe, the country should have had power cuts long before the current deficit but relied on the central bank for bail outs.
These bail outs, however, stopped last year October after the new minister of finance put an end to central bank financing of electricity imports.
Central bank governor John Mangudya said the apex bank had been funding power imports for the past five years through the use of a government overdraft facility.
The power utility ZESA was not generating enough revenue to pay for its imports, said Mangudya.
"Yes, there was no load shedding in the past four or five years, courtesy of the overdraft with government.
So, whilst you had your electricity every day for five years, we were paying for it, all of us as a country. ZESA were able to purchase foreign currency, using the overdraft from government," he said.
Chivaura said in the short-term Zimbabwe needed to import power to cover the supply gap.
"We can access power, but this is only accessed with cash up-front. I need US$14m to expunge load shedding, but we still have indebtedness to sort out," said Chivaura.
He said the power utility has a "very substandard tariff".
"Right now, our tariff is 1.2 US cents per kWh, the cheapest electricity in Africa, and in the world."
With tariffs still relatively low, government will have to continue offering support as Eskom itself might not be able to offer further credit.