Zimbabwe: Zesa lost $4.5b due to Covid-19 lockdown
POWER utility Zimbabwe Electricity Supply Authority (ZESA) lost $4.5 billion due to the Covid-19 lockdown, which it is now off-setting by frequently hiking electricity tariffs, a cabinet minister has disclosed.
Energy Minister Soda Zhemu made the stunning disclosure last Thursday week during the weekly question and answer session in the Senate, Parliament’s Upper House.
He was responding to a question from Rangarirai Bwawanda, who is also Chief Nhema.
The legislator-cum-traditional leader wanted to know why ZESA was increasing tariffs on a monthly basis.
“Why have things gone up minister? There is now a stable official rate after the auction system and there is no change. Beef was $200 and its price has gone up and electricity has also gone up,” enquired Chief Nhema.
“For example, yesterday I bought electricity for $10 000 and I got 1 000 kilowatts. What has gone up? Tollgate was $45 for light vehicles and it is now $145. Why have things gone up?”
In response, Soda said ZESA had experienced a severe deterioration in cash flows between March and September this year due to loss in value of money for tariffs, which fell by 337%.
He also said non-payments to coal mining companies led to serious incapacitation of the firms while the power utility owes countries, where it imports power from, like Mozambique more than US$100 million.
“That was the loss in value percentage due to lockdown. People were not earning much because of the lockdown. The energy company lost a total of $4.5 billion. It was very difficult to rectify or fix anomalies within the power company because of lack of funds.
“As we speak, nothing was being done but the government made it a point that people get electricity even during the lockdown,” said Zhemu.
He stressed the government had no desire of burdening consumers, but instead domestic users were enjoying a subsidy in the form of a difference between US 0.9 c and US0.24 during peak hours.
The minister argued ZESA’s main objective was to maintain the supply of electricity for domestic use.
“As I have mentioned before, electricity is imported from outside the country. It is very expensive because it costs US.9c and during peak periods, it can reach 24 cents.
“It might look like a coincidence that there is a rise in electricity, but we need to reflect on the cost and all the modalities involved in an effort to have electricity reach the people. We are looking at all the costs so that people and companies are able to pay for the costs.”