Zimbabwe struggling to clear debt to S. Africa’s power utility amid forex shortages

HARARE, Sept. 27 — Zimbabwe is struggling to pay off a 44 million U.S. dollars debt to South Africa’s power utility, Eskom, due to ongoing foreign currency shortages in the country.

This has resulted in Eskom threatening to cut off supplies to Zimbabwe for the third time in three months. The state-run Herald newspaper reported Monday that Zimbabwe’s power utility, ZESA Holdings, had breached the terms of a payment plan it agreed with Eskom in July due to foreign currency shortages. “We entered into an agreement with Eskom where we are supposed to pay the at least 10 million dollars per week and sometimes, because of the way the foreign currency comes into the country, it is cyclical in nature, it means sometimes we are behind now and then. But we are going to catch up and there will be no switch off,” the newspaper quoted central bank governor John Mangudya as saying. Zimbabwe imports 300 megawatts of power from Eskom and another 50 MW from Mozambique’s Hidroelectrica de Cahora Bassa (HCB). Zimbabwe requires 1,400 MW daily but is only able to produce around 980 MW due to aged power plants. It plugs the shortfall through imports. – XINHUA