Why Zimbabwe can’t pay Eskom

Drought-stricken and going through power-generating difficulties, Zimbabwe – which has been unable to service its outstanding debt with local power utility Eskom – faces a huge economic decline, set to spill into South Africa and the southern Africa region.

This is the view of independent energy analyst Chris Yelland following an announcement by Eskom’s group chief executive Phakamile Hadebe that his counterpart, the Zimbabwe Electricity Supply Authority (Zesa) failed last Friday to pay $10 million (R140 million) of its outstanding debt, despite undertakings by Zimbabwe Finance Minister Mthuli Ncube.

Eskom spokesperson Dikatso Mothae couldn’t yesterday say whether Zesa had yet settled its debt with Eskom or reveal by how much Zimbabwe is behind in its payments.

Currently experiencing 15 hours per day of load shedding, which has affected the tobacco and mineral-rich country’s economy, Zimbabwe, which has been reliant on Eskom and Mozambique’s HCB for additional power, needs at least 1,700MW per day to meet demand.

“Zimbabwe faces quite significant arrears in debt, some of which its authorities have promised to pay.

“The country faces a big drought problem, which has affected electricity generation at the Kariba Dam with low water levels – something which has affected power generation at its hydropower station,” said Yelland.

“The coal-fired Hwange power station has also run into problems, which has led the country to be in a poor state to produce enough electricity.

“With the value of its currency reduced, which South Africa and other countries are refusing to accept, Zimbabwe is in a terrible economic state.

“South Africa does not want to be paid in Zim dollars, but in US dollars or in rands,” said Yelland.

“The power situation has affected exports and created low productivity levels. If Zimbabwe cannot get electricity, that country’s entire economy will become weaker and collapse.

“It is a vicious circle, set to have a negative impact on South Africa and the entire southern Africa regional economy because of the continuing influx of illegal migrants. Surely, South Africa does not want to drive its neighbour over the edge.

“Compared to money Eskom is owed by local municipal councils, which runs into over R20 billion, the amount Eskom is owed by Zimbabwe is insignificant.”

Zimbabwe, said Yelland, had a 3,000MW demand of electricity per day, which it could not meet.

– brians@citizen.co.z

For more news your way, download The Citizen’s app for iOS and Android.