HomeLocalDebt stalls Batoka station construction

Debt stalls Batoka station construction

Paidamoyo Muzulu

CONSTRUCTION of the Batoka hydro-power station, with a potential to generate in excess of 3 000 megawatts daily, has stalled because Zimbabwe is failing to settle a US$260 000 000  debt it owes Zambia for the shared Kariba infrastructure the country inherited at Independence.

“The ultimate solution to our power energy lies in the construction of Batoka, which will generate something between 2 500 to 3 000 megawatts,” Biti said in a ministerial statement to parliament. “We, however, have serious disputes with the Zambian government.”

 

The minister explained that the dispute revolved around an unpaid debt for infrastructure that Zimbabwe inherited at independence from the Central African Power Corporation (Capco) during the federation era.

Most of the physical infrastructure of Capco was located within Southern Rhodesia.

“When this company split in 1980, we had to compensate the Zambians for the infrastructure that was on the Zimbabwean side,” Biti said. “So, we owe Zambia about US$260 million, which they are saying we must pay first before they can allow us to construct.”

The issue is being handled politically and efforts to compensate the Zambians in kind have not yielded any positive results.

“We have tried to persuade them and ask them to give us the go-ahead so that we find money for Batoka, then we give them for free a proportionate and pro-rata energy which is equal to the debt,” the minister explained. “Unfortunately, as honourable members would know, the issue has become very political as the Zambians think that Northern Rhodesia developed Southern Rhodesia, so Southern Rhodesia should pay more. The issue has become problematic.”

Investment in Zimbabwe has been subdued in the last decade as Zesa has failed to provide uninterrupted power supplies to industries and manufacturers. The electricity authority sometimes switches off consumers for up to 12 hours in their haphazard load-shedding schedules.

All the power stations in the country, including Kariba, Hwange, Munyati and Bulawayo, are generating slightly above 50% of their capacity. The country has to rely on imports from South Africa, Mozambique and the Democratic Republic of Congo. The power plants are producing about 1 300 megawatts a day against a daily demand of above 2 000 megawatts.

Zesa has debts close to a billion dollars owed to different power companies that supplied power on credit in the past.

Essar Holding from India are said to be interested in refurbishing and developing Hwange Power Station phase 7 and 8. The company is also negotiating with the government to buy a 54% stake in Ziscosteel.

“Essar has expressed an interest in refurbishing Hwange. This would help the country along,” Biti said, “Negotiations will start soon.”

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