Power utility admits it is broke and powerless

The Zimbabwe Electricity Authority (ZESA) has admitted to a nation already suffering sweeping and extended power cuts that it is broke, and things will get worse.

Prof Christopher Chetsanga, ZESA's chairman, recently told local media that the country's energy provider was in debt to the tune of Z$105 billion (US$420 million at the official exchange rate), and would immediately lay off 600 of its staff.

The country's inability to produce sufficient electricity has forced it to import 35 percent of the national requirement, or 650MW, from neighbouring countries, mainly South Africa, but also the Democratic Republic of Congo and Mozambique.

South Africa has also experienced rolling blackouts recently because its power utility, Eskom, had miscalculated the extent of a rising demand for electricity by forecasting an increase of 3 percent, when in reality it has surged to 4.5 percent. Eskom has a total capacity of 36,400MW, of which about 8 percent is spare capacity, against the international norm of 15 percent.

In some parts of Zimbabwe people have been without electricity for three months. The power utility's inability to keep users supplied is being caused by the unavailability of foreign currency to replace and repair outdated equipment; ZESA said it required US$30 million to repair equipment that had become inoperative.

Zimbabwe's economy has been in freefall in recent years, with the formal economy shrinking by 65 percent, agricultural production down by 50 percent, unemployment touching 80 percent and inflation running at 1,281 percent, the highest in the world, causing a slew of shortages, including food, fuel, medicines and foreign currency.

"We are charging sub-economic tariffs," Chetsanga said. "For 2006 we generated $26 billion (US$104 million) and had an expenditure of $66 billion (US$264 million), leading to a deficit of $34 billion (US$136 million), which has already ballooned to $105 billion due to high interest rates."

He said ZESA imported electricity at US2c per kilowatt and then sold it on to the consumer for US0.2 cents per kilowatt.

President Robert Mugabe's ZANU-PF government, through its finance ministry and the Reserve Bank of Zimbabwe, had offered to help bail out the power utility company, Chetsanga said, because ZESA's precarious financial position meant it was not meeting its operational requirements.

Only two of the six thermal generators at Hwange Colliery Company, in Matabeleland North Province, were functional. "To service all the four [non-operational] units, we will require at least US$30 million and we don't have that money. Major generation constraints are being experienced at Hwange Power Station, whose full capacity should be 780MW but it is currently operating at 350MW on average as a result of inadequate resources, mostly foreign currency for plant overhauls."

Kariba South Hydro Station, on the Zambian border, was only generating 350MW of a potential 750MW.

However, despite the inability to raise foreign currency and the Southern Africa's looming power shortages, the power utility was confident that a solution would be found.

Chetsanga said there were plans to raise US$2.5 billion for the construction of the Batoka hydropower plant near Kariba in the northwest of the country, the Gokwe North thermal power plant, in Midlands Province, and the exploitation of methane gas in Lupane, Matabeleland North Province. He did not elaborate on the plans for raising the money.

Many consumers have had to get used to living without a consistent electricity supply, and ZESA has been running regular newspaper adverts providing tips for consumers on how to save electricity when they have it.

With power no longer guaranteed, urban Zimbabweans are now using firewood as their main source of energy for cooking or heating, stripping the surrounding countryside and farms of their trees.

Tinashe Moyo, an unemployed university graduate, told IRIN that after failing to find work he joined his father on a farm close to the capital, Harare - one of the farms redistributed to landless blacks as part of Mugabe's fast-track land reform programme in 2000 - which previously used to grow roses for export but now does a brisk business in timber.

"We have a lot of virgin land and because of the regular power cuts; a lot of people are now buying firewood from our farm because it is very close to the capital." Moyo has also opened a depot in the city to make the wood more accessible to his customers.

His enterprise is not unique: in the growing absence of electricity, vendors are selling firewood along all the highways leading to Harare to supply the spiralling demand. "I need to feed myself and my wife is expecting our first child, and although I am certainly cognisant of the environmental degradation we are causing, this is the only way I can make money."


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