Zimbabwe

Zimbabwe: Power crisis will worsen situation

by Felix Njini

Harare, Apr 28, 2005 (Financial Gazette/All Africa Global Media via COMTEX) -The local industry, already limping owing to the current economic recession, might sink deeper into crisis because of the resurgence of electricity cuts, analysts told The Financial Gazette this week.

The power outages that hit industry last week invoked memories of 2003 when production almost ground to a halt following a severe hard currency crunch that crippled the Zimbabwe Electricity Supply Authority's (ZESA) capacity.

Sources said ZESA was struggling to secure foreign currency needed to import about 100 mega watts of electricity from Snel of the Democratic Republic of the Congo (DRC).

This has resulted in the power utility suffering energy shortfalls.

The electricity cuts, said analysts, could derail efforts to turn around the economy.

Zimbabwe National Chamber of Commerce president, Luxon Zembe, said power cuts would further reduce industry's capacity from the current 60 percent.

He said: "This is going to hit hard the supply of goods and services and further cause shortages on the market".

Zimbabwe is currently grappling with shortages of basic commodities ranging from staple maize, cooking oil and sugar among other things.

"The Reserve Bank of Zimbabwe has been trying to make sure ZESA has adequate foreign currency for imports, but the authority itself has done nothing to build its capacity. Demand is increasing as supply is going down and the situation will be worse in 2007," said Zembe.

Regional power suppliers are expected to run out of excess electricity to export in 2007.

Obert Nyatanga, the ZESA general manager corporate affairs however, said the current blackouts were a result of a transmission failure in the DRC.

He said the power utility is being allocated enough foreign currency (US$4.5 million a month) to import electricity and has been pre-paying all its imports. He admitted, though, that the authority did not have money to buy spares and repair generators.

ZESA said it has lost 450 MW due to generator failures at its Kariba Power Station.

"We should be having 250 MW of internal reserves, but we do not have those. We have no money to buy critical spares and maintain our generators but the current problem is emanating from a transmission failure in Luano in the DRC," Nyatanga said.

Insiders however, said the real problem was that of lack of foreign currency. They said Snel, which has previously threatened to switch off ZESA over non-payment of electricity imports, had cut off supplies to Zimbabwe over non-payment.

"If they have the money, why can't they get the power from elsewhere - is Snel the only exporter in the region?

"There is no money, they failed to properly balance their books . . .," said the source.

Nyatanga defended ZESA, saying the regional suppliers, HCB of Mozambique and ESKOM of South Africa had also run out of surplus power to export.