The troubled Zimbabwe Electricity Supply Authority (ZESA) might secure a US$80 million loan from Development Bank of Southern Africa (DBSA) to boost power-generation to mitigate the effects of power cuts.
A delegation from the DBSA was in Zimbabwe Friday touring ZESA power stations and the coal supplier, Hwange Colliery Company (HCCL).
The loan is expected to come at an opportune time for ZESA, currently struggling to meet its cash obligations.
Cash constraints also meant ZESA could not import enough power from regional countries to close the deficit created by an insufficient generating capacity.
Zimbabwe is currently facing severe power outages as regional suppliers have reduced power supplies that the nation’s power utility can import into the country at any given time due to a failure to pay-off debts.
Regional power utilities of the Democratic Republic of Congo (DRC), Mozambique and Zambia had given ZESA up to June 30 to clear a US$57 million debt for electricity supplies.
Zimbabwe owes $40.3 million to Hydroelectrica Cahora Bassa (HCB) of Mozambique, US$9.8 million to Snel of the Democratic Republic of Congo and $1.7 million to Zambia (Zambian Electricity Supply Commission) ZESCO.
A further $5.7 million is owed to Mozambican electricity distribution company, EDM Power.
Five of Zesa Holdings’ generating units at Hwange Thermal Power Station are down mainly because of limited coal supplies.
The DBSA delegation also met financial technocrats from ZESA and government to discuss the finer details of the loan.
The Minister of Economic Development and Investment Promotion, Elton Mangoma, said: “The loan will help ZESA solve critical issues of power stations and coal purchases to restore normal power generation.”
Over the years, the power utility has also failed to raise its generating capacity by building new power stations, let alone recondition old or existing machinery.
ZESA chief executive officer, Ben Rafemoyo, said that he was positive the loan would be secured, “although there were still some issues to discuss”.