Business News 25.8.2016 01:55 pm

Zimbabwe energy distributor scales up debt recovery rate

Image credit: Thinkstock.

Image credit: Thinkstock.

The parent energy company says it needs to pay for power imports from regional countries such as South Africa and Mozambique.

The country’s energy distributor, Zimbabwe Electricity Transmission and Distribution Company (ZETDC), has intensified its efforts to recover more than US$1 billion in debt owed to it by consumers.

Of the total debt, domestic consumers account for US$300 million.

“ZETDC is intensifying revenue collection efforts in order to maintain the prevailing stable power supply situation,” the energy supplier said on Thursday.

“To that end, ZETDC would like to advise all prepaid customers in arrears that the recovery rate of 40% will be increased to 50% with effect from September 1, 2016, to ensure they pay up their debts within reasonable periods.

“All business customers on both prepaid and post-paid platforms in arrears are also being advised to clear their debts within six months with effect from September 1, 2016, for the power utility to be in a position to supply adequate electricity to customers.”

ZETDC said it would hand over defaulting customers to its lawyers.

At the start of the programme five years ago, ZETDC said it would recoup only 5% from every transaction made by its customers, but the utility has been raising its recovery percentages, which now has reached 50%.

The energy distributor has been struggling to recoup debt from its customers. Five years ago it introduced the prepaid meter system.

For years Zimbabwe has failed to produce enough power and has often struggled to pay for imported energy. Local electricity production has been hampered by obsolete equipment, defaulting customers and vandalism.

In July, the Zimbabwe Energy Regulatory Authority (ZERA) shot down an application by ZETDC to have tariffs increased by 49%, from 9.86 US cents per kilowatt hour (c/kWh) to 14,69c/kWh.

ZESA Holdings, the energy parent company, in seeking to have the tariffs increased, said it needed to pay for power imports from regional countries such as South Africa and Mozambique.

But the energy regulator turned down the tariff hike request, citing the non-performing economy and government efforts to improve the ease of doing business in Zimbabwe.

Zimbabwe needs 2 200 megawatts (MW) of power, but the power plants are only producing 1 200MW against a capacity of 1 960MW.

An extra 500MW is imported from South Africa’s Eskom (300MW), the Democratic Republic of Congo (100MW) and Mozambique (between 100MW and 185MW).

– African News Agency (ANA)

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