ZESA Faces US$350 Million Debt for Kariba Power Station Renovations

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ZESA Holdings (ZESA) is facing a debt of US$350 million for renovations at the Kariba South Power Station. This debt has accumulated due to the long-standing subsidised tariff regime, according to a report by NewsDay.

Currently, Kariba South has a capacity of 1,050 megawatts (MW) but is only generating 185 MW due to depleted water levels at Lake Kariba.

This information was disclosed by the Parliamentary Portfolio Committee on Energy and Power Development in an update on Zimbabwe’s electricity supply. The committee stated, “According to ZESA Holdings, they possess a huge loan burden in renovating some of the units at Kariba, South which amounts to US$350 million. ZESA created a huge debt burden on the utility, including foreign currency commitments for loan repayments and spare parts purchases. Management added that repayments need to be done in foreign currency, and they have resorted to exporting power in order to generate foreign currency.”

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The committee urged the Treasury to promptly disburse funds for servicing loans related to power projects, to address Zimbabwe’s long-standing debt servicing challenges, improve the country’s creditworthiness, and facilitate access to affordable energy financing.

ZESA’s foreign currency obligations are preventing the power utility from servicing the Hwange Thermal Power Station. The committee highlighted that Zimbabwe continues to experience severe power outages as the distribution supply fails to meet the nation’s growing demand. They also revealed that the Zimbabwe Power Company, a subsidiary of ZESA, has been forced to import power from neighbouring countries to alleviate load-shedding.

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