Zimbabwe: Zesa Set to Raise Forex From Tobacco Sales

Source from:  The Herald (Harare) 7 May 2007 05/09/2007

POWER utility Zesa Holdings expects to raise substantial amount of foreign currency from tobacco contract farming to bankroll its projects, a company official has said. Acting chief executive, Mr Ben Rafemoyo, said on Friday that the foreign currency would enable them to import spare parts and transformers to carry out refurbishments on their plants. "We hope to raise a reasonable amount of foreign currency to cater for replacements and unlock the possibility of importing material from China," he said. This, he said, would be done to increase generation capacity and system viability in order to improve reliability of supply. Mr Rafemoyo said Zesa required intensive funding and had also signed a number of agreements with regional bodies. "We have signed an agreement with Namibia power utility, Nampa, that will see us accessing up to US$40 million," he said. Generation at Hwange, he said, required major overhauls to inject new life to increase capacity. "Major overhauls at Hwange Unit 1 will see generation increasing from the current 300 megawatts to about 780 megawatts," Mr Rafemoyo said. He said the process of importing spare parts took as long as 12 months after the placing of orders, adding officials from Nampa and Zesa had been sent to Germany to convince the suppliers to speed up the process. Mr Rafemoyo said they hoped to complete the first unit by the end of the year and then work on the other three units. He said they had completed refurbishing and upgrading the Kariba hydropower plant and the generation capacity increased from 666 megawatts to 750 megawatts. The power utility was also involved in courting potential partners to finance the projects, he said, adding that progress had been made at Kariba where government and some funding partners had signed a memorandum of understanding. Mr Rafemoyo however said the company was lagging far behind in meeting targets in boosting generation, transmission and distribution capacity at an estimated cost of US$2 billion under its five-year business development plan expected to last until 2010. The country imports 35 percent of its electricity requirements from South Africa, Zambia, Mozambique and the Democratic Republic of Congo. Enditem