HARARE – Zimbabwe has extended its $40 million electricity supply deal with Namibia for another nine months following power utility Zesa Holdings (Zesa)’s failure to deliver on the agreement.
In 2007, Zesa and NamPower entered into a deal in which the Namibian power utility made available funds towards the refurbishment of the Hwange pwer station and in return Zesa was supposed to deliver 150 MW of power daily to NamPower for five years.
The country’s power purchase agreement with Namibia was expected to be fully met last year, but it was extended for another year after the country failed to honour the agreement on account of persistent transmission breakdowns.
Zesa is sending the electricity via Botswana to South Africa before it reaches Namibia.
Josh Chifamba, Zesa chief executive yesterday told delegates attending a power sector symposium organised by the Zimbabwe Energy Regulatory Authority (Zera) that the extension was to ensure that Zimbabwe delivers on a shortfall of nine month’s electricity that has not reached Namibia.
“The contract was supposed to end in November 2013, but because we didn’t supply to NamPower all that was due to them on time we are now being forced to extend the deal by another nine months,” he said.
This comes as the southern African country, which is battling acute power shortages, has recently announced a punishing load-shedding schedule that has seen households going for more than nine hours without electricity on a daily basis.
Zimbabwe has an electricity demand of 2 200 MW but the country produces around 1 200 MW per day. In an effort to meet its growing demand the country is forced to imports 35 percent of its power requirements from Mozambique and other regional suppliers.
Chifamba said he is hopeful the country will have adequate power supplies by 2017 when most of the projects are up and running.
A recent report by Zera revealed that a cumulative capital expenditure of $2,5 billion over five years — focused primarily on Hwange and new capacity (Hwange and Kariba extensions, Gairezi Hydro and ZPC Solar) — is required to improve electricity generation in the country.
“Hwange is projected to deliver steady performance improvement as demonstrated by the higher capacity factor. Kariba South production levels are at acceptable levels dropping off in 2017 due to anticipated water constraints when Kariba South Extension comes on line. Performance levels of the small thermals are sustained at current low levels,” read part of the report called Cost of Service Study on electricity supply.
Expansion works which commenced this year at Kariba South, according to government, were expected to be completed in 2017, adding 300MW to the national grid. The project is expected to cost $400 million.
The report further stated that quality and lack of consistency in information provided by ZPC and Zimbabwe Electricity Transmission and Distribution Company (ZETDC) needed to be improved to reduce access to information challenges in the sector, the Zera said in its report.
“Inconsistencies apply both between ZPC and ZETDC and internally in each of the two entities. Problems include technical and commercial parameters (sales, customers numbers, operation and maintenance costs),” the report reads.