Mudzuri backs down on power exports

HARARE – Zimbabwe Energy Minister Elias Mudzuri has backed down on his decision to stop struggling Zimbabwe Electricity Supply Authority (ZESA) from exporting power to Namibia.

Last week Mudzuri told ZimOnline that he had ordered the country’s power utility ZESA to stop exporting power to Namibia since Hwange power station was not working properly.

But Mudzuri on Tuesday said ZESA will still honour the US$40 million power export deal it signed with Namibia’s power utility – NamPower – in 2007.

"The government of Zimbabwe and ZESA remain committed to the terms of both the loan agreement and the power purchase agreement as well as the Southern Africa Power Pool trading protocols," Mudzuri said in a statement. "Any changes and improvement to the agreement are to be done within the context of the agreement itself."

In 2007, ZESA entered a deal with NamPower in which it provided a US$40 million loan to refurbish Hwange power station. In return ZESA would supply electricity to Namibia.

But frequent breakdowns at Hwange have meant ZESA has had to import power from other regional suppliers for export to Namibia to comply with the 2007 deal, and Mudzuri last week ordered ZESA to stop power exports until Hwange is back in operation – a decision the minister has now reversed.

Zimbabwe generates 1 100MW far below the required 2 000MW.

ZESA’s inability over the years to boost generation capacity at its ageing power stations and a critical shortage of foreign currency to import adequate electricity from neighbouring countries has left Zimbabwe grappling with severe power shortages.

The Zimbabwean energy firm says cash-rich foreign investors remain reluctant to provide funding badly needed to boost power generation because of uncertainty about the country’s future political and economic direction.

A coalition government formed by President Robert Mugabe, Prime Minister Morgan Tsvangirai and deputy Premier Arthur Mutambara has brought a degree of stability to Zimbabwe’s political situation but the future remains uncertain.

Incessant squabbling between Mugabe and Tsvangirai has left political analysts wondering about the Harare coalition government’s long-term viability while most potential investors appear to have adopted a wait and see attitude before they can consider making any significant investments in the country. – ZimOnline