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Zesa needs US$300m to address backlog

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Zesa needs US$300m to address backlog

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ZESA Holdings has a backlog of 305 000 domestic customers who need to have electricity connected to their homes, but requires a whooping US$300 million to connect all of them, a senior official has said.

In a presentation at last week’s Chamber of Mines of Zimbabwe annual conference in Victoria Falls, Zesa consultant Engineer Cletus Nyachowe told delegates that the power utility was facing a number of challenges in providing uninterrupted power to customers, and even connecting new customers.

He called for support from the private sector.

This comes as Zesa has clinched a deal for 100MW from Zambia, with the details set to be thrashed out soon.

Additional power is being negotiated with Mozambique from its 450MW Temane gas project, in a bid to connect as many customers as possible to the grid.

Officially opening the miners’ conference, President Mnangagwa directed Zesa to ensure mining projects were speedily connected to the grid so that they start operations.

There are indications that about 25 mining projects are on the electricity waiting list, with three of them, as confirmed by Eng Nyachowe in his presentation, being lithium miners.

In respect of the domestic consumers backlog, Eng Nyachowe said: “We have a backlog of 305 000 customers that are not connected. These are customers who have built their houses and have sent in applications and want to be connected.

“We are looking at a Capex (capital expenditure) of about US$300 million to connect those customers in the next three years. So we are negotiating a facility that should help us do that. We should be able to close that very soon.”

Turning to mining companies, Eng Nyachowe said to speed up their connection to the grid, they should consider emulating the deal signed between Zesa and Dinson Iron and Steel Company last week for the construction of a 100km powerline from Sherwood in Kwekwe to the company’s steel plant in Mvuma.

Dinson is the operating arm of global steel giant Tsingshan Holdings, which has invested in a steel plant at Manhize, which will require up to 500MW, presently about a third of national power demand.

Eng Nyachowe said the mining sector was on a rapid growth trajectory which has seen capacity utilisation rising in most sub-sectors, resulting in the industry generating US$5,3 billion last year, despite challenges associated with Covid-19 and power shortages.

Formal employment in the mining sector also rose to over 37 000 last year, plus the over 500 000 artisanal and small-scale miners mainly in the gold sector.

“The mining industry is on steroids. We can actually confirm it on the supply side. Currently, we have applications for connections of up to 12 100MW in the next three years.

“Presently, mining industry capacity utilisation is 80 percent and when more capacity is achieved, demand will rise further. Right now we have three lithium mines who want power like yesterday and we are negotiating similar deals (Public-Private Partnerships). “We will offset their investment through a reduction in tariff over an agreed period,” said Eng Nyachowe.

Zimbabwe has two major power sources of electricity, Kariba South and Hwange Thermal power stations.

Kariba has an installed capacity of 1 050MW but that output cannot be obtained all the time given variables such as water levels, considering that the water is shared between Zimbabwe and Zambia.Herald.

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