Sable power debt rises to $132m

sableTinashe Makichi Business Reporter
The Zimbabwe Electricity Transmission and Distribution Company is owed $132 million by Sable Chemicals from $123 million recorded in December last year but the power utility said it will not cut off power supplies to the company because of the strategic standing of the ammonium nitrate manufacturer in the economy.

Sable Chemicals’ debt has been constantly rising and Government this year negotiated a tariff reduction to enable the company to operate viably.

Sable faces serious challenges relating to the cost of running the electrolysis plant for the production of the hydrogen used to manufacture some of its ammonia, as it requires lots of power.

The situation has significantly affected the Kwekwe-based manufacturer’s capacity to produce ammonium nitrate fertiliser to meet requirements for the whole country.

Chemplex chief executive Mr Misheck Kachere recently said challenges with the electrolysis plant militated against efforts to increase production.

Sable, which is operating at an average 40 percent of capacity due to funding and plant constraints, imports about 30 percent of the ammonia it requires to produce AN fertiliser.

“Some electrolyte units of the electrolysis plant are beyond repair. If you want to repair them you will need $4 million for each unit. So these need rehabilitation and we have 10 units. With the power that we are getting from ZESA, that’s sufficient,” he said.

Mr Kachere said they were, however, still hopeful that they will be able to secure investors to provide the funding to replace the high power consuming electrolysis plant by 2018.

ZETDC is in total owed about $997 million by its consumers as at March this year with a major chunk held by domestic, Government and commercial users.

The country’s mining sector owes the power utility $244 million which is 40 percent of the total amount owed to the power utility as at March this year.

Speaking before the Parliamentary Potfolio Committee on Mines and Energy yesterday, Zimbabwe Electricity Transmission and Distribution Company managing director Engineer Julian Chinembiri said ZESA is looking at various initiatives to recover the debts so that they can focus solely on service delivery improvement.

He said the unpaid bills were hampering operations and viability of the power utility.

“The mining sector owes us a lot and we are considering selling off the debt that is close to $1 billion but we are still awaiting approval from principals.

“We are discussing the issue of selling the debt. We started some two years back, we did a tender and the tender was to identify the strategy on how to do it but we haven’t moved from there because we are waiting to negotiate with our principals on whether we can move forward with the idea,” said Engineer Chinembiri.

“We did this so that we can get our money earlier than waiting for the 30 percent on prepaid meters. We also proposed payment plans so that we can extinguish the debt in six months so that at least we will be able to pay off our debt and improve our systems.”

Local authorities’ debt is currently sitting at $194 million which is 20 percent of the total debt. Other parastatals and Government ministries jointly owe the power utility about $44 million in arrears in the period under review.

Zesa’s domestic and external debt for the period was sitting at about $374 million.

Engineer Chinembiri said the company is looking at various proposals to resolve challenges surrounding the installation of prepaid meters in some residential areas.

There are 87 537 remaining points still on post paid meters while pre-paid accounts are close to 540 000.