Zambia owes Mozambique’s EDM $70m for electricity supplies – Minister

The Zambian government, through Zesco Limited, owes EDM of Mozambique up to US$70 million which is currently being paid through undisclosed monthly instalments, Minister of Energy Mathew Nkhuwa has disclosed.

And Nkhuwa says the Kariba dam needs three years of normal rainfall to get the Kariba North Bank Power Station to its normal generation levels.

Meanwhile, the mines are currently exempted from load shedding, according to Nkhuwa who has said they cannot be allowed to import power as “Zesco will crumble”.

Speaking on Hot FMs breakfast show, Monday, Nkhuwa said that the idea of importing power from Mozambique had been shelved as the price being offered was too high.

“If you remember, I did actually go to Mozambique and we talked with the Mozambican government and EDM and so on. We went there with Zesco but I think what they were trying to charge us was a bit on the higher side. They wanted something like 12.9 cents per kilowatt hour and that was going to be more expensive now than what we are getting from Eskom. I think for now, we have shelved that idea because the cost was going to be much more than what we are paying. Yes, we do [owe EDM money] and there is a payment plan, we are paying them. We owe them US$70 million, I haven’t looked at [the payment plan] but I know that we are paying some money every month,” Nkhuwa disclosed.

On the US$27million paid to Eskom of South Africa, he said the amount included a debt payment of US$6.5 million owed to the company.

“First of all, let’s start with the US$27million. If you remember, even when I came to the studio, the amount for the power and wheeling, which is the transportation of the power which passes through Zimbabwe and Botswana, is US$6.5 million. So a total of US$20.5million is for energy and transportation then the US$6.5 million, that’s the arrears for 2016 that we are paying because we have been paying this bill that we have with Eskom. So the power, that is US$20.5 million and not US$27 million and we are importing 300 megawatts of power from Eskom,” Nkhuwa said. “And at the moment, you know that the Kariba has got six generators [but] we are only running one generator which is producing just about 130 megawatts instead of 180 megawatts. The situation of water is still bad, I know that there was a report that the water did not reduce for the last few days I think in that the level is more like constant. We are only operating one machine of six and the deficit has since moved from 700 megawatts to about 890 which is about 900 megawatts. So now if we bring in 300 megawatts, you deduct from 900, we still have 600 megawatts deficit so we won’t see much change in terms of the benefit to the people.”

He said the government hopes the generator which had been grounded at Maamba Collieries Limited would soon be operational to ease the pressure on the national grid.

“Well, I hope within the next fortnight, we should get the other generator working at Maamba collieries as well. We paid them US$10 million and we are looking at paying them another US$10 million this month but that generator is not down because of money, it’s just a mechanical fault that is there and they are repairing it and we went there to inspect, to make sure that what they are saying is true. I was there with the Minister of Finance and it’s true they were repairing, the tubes actually were punctured. I think the quality of tubes was not good so they are replacing some tubes there. So it’s quite a big job that they are doing,” Nkhuwa said.

Meanwhile, the minister said power generation at the Kariba North Bank Power Station will increase as the water levels rise.

“Let me start with the Kafue first; the Kafue with maybe two weeks of consistent rain, we can rump up from about 600 to 800 megawatts because the Kafue has got the capacity of 990 megawatts and we only scaled down to 600 megawatts. So the Kafue River is doing very well. It is the Kariba dam that is not doing very well. The Kariba dam, we have a capacity of 1,080 megawatts and right now, we are producing only 130MW. That’s why we are badly hit. So we have six turbines there and we have shut five and there is only one which is working. So that is where, that dam to fill it up, we need at least three years of stable rains. But it means that if the level goes up, we shall be generating from there. Ba lesa balatuletela imfula, ileisa infula nomba line ileisa (God will bring us rains, it’s coming very soon, it’s coming),” Nkhuwa added.

He said with the current power deficit in the country, allowing the mines to directly import power will lead to Zesco’s downfall as they are the company’s main source of revenue.

“I will get straight to the point on that one; the domestic customer is paying 3.6 cents per kilowatt hour which cost is not cost reflective at all and the mines are paying Zesco $9.3 cents per kilowatt hour and that is the little money that they are getting to be able to make the operations. If all the power is given to the people, the general public, then Zesco will just crumble. [If we allow the mines to import], Zesco will lose out on the income they are getting, that is the income that they are depending on to do their operations at the moment. So at the moment, the mines are not really affected [by] this thing…We have asked them to reduce the usage of power which they have, they are trying to be economical and so on. So they have reduced their demand but they are managing, they are doing load management on their side. This is where we get our foreign exchange and if, for some reason, we don’t give them power, then the situation of the kwacha will even be worse. So we can’t afford to do that with the mines,” said Nkhuwa.

 

Source: Diggers

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