- Zambezi River levels rise to highest in 20 years
- Elnino weighed on power generation in SADC
- ZESA pays off ESKOM debt in full
- Hwange units under refurbishment
In 2019 Zimbabwe’s economy grappled with rolling power cuts netting over 18 hours in a day in some cases, a feature which was to later become common across the regional bloc SADC.
The underlying challenge was both a structural challenge as endogenous driven. The El Nino drought, recorded as the worst drought to hit Southern Africa in at least 20 years, had driven dam level to drastically low levels that electricity generation had to be suspended.
Namibia was not spared while the northern neighbour, Zambia which we share the Kariba Dam with, also buckled under the pressure of El Nino while South Africa initially alternated with thermal but could not sustain demand levels, gradually leading to similar power cuts. This became a regional crisis requiring urgent attention.
For Zimbabwe, the challenges ran deeper as the ability to cushion power availability through imports was limited because of outstanding obligations. Zimbabwe had recurring debt due to ESKOM, SA state-controlled power utility and Cahorra Bassa of Mozambique.
Zimbabwe increased its total electricity generation capacity to almost 1500 Megawatts after upgrading the Kariba Power Station a hydro facility tapping from the Kariba Dam. A third of the total is attributed to Hwange Thermal Power Station, a yester year archaic plant, which is currently undergoing an upgrade through the assistance of the Chinese.
The dry spell and frequent breakdown at Hwange coupled with the inability to import due to outstanding dues, culminated in the aforementioned blackouts, in turn, driving national produce to a 10% decline. The dearth in national output as measured by GDP was also impacted by a weak macro environment characterized by hyperinflation and a volatile exchange rate of the newly introduced Zimbabwe dollar.
The outcome was a culmination of this, a manifestation of low dam levels at Lake Kariba, equipment running obsolete at the Hwange power facility and acute foreign currency shortages. Rising dam levels in the Zambezi river and Kariba has however reignited hopes of improved power generation at Kariba
The Zambezi River Authority (ZRA) on Monday confirmed that the water levels were trending above the long-term average and the highest in 20 years. To date, water levels in Lake Kariba have risen by about a metre to stand at 477,79m, with about 15,92 percent usable storage as of Monday. Water levels were at 480,65m, with about 36,68 percent usable storage recorded on the same date last year.
Kariba generates 1 050MW at maximum output, complemented by Hwange Power Station which has a capacity of 920 MW plus imports from Eskom (South Africa) and Mozambique to meet a national demand of between 2200-2400MW of power.
Hwange’s capacity has been reduced to 400 MW due to obsolete equipment. According to a recent update by ZPC: currently, Units 1, 2, 4 and 5 are generating about 400MW. There are plans to add Units 3 and 6 which is expected to increase electricity supplies by 260 MW as refurbishments are currently underway.
Zimbabwe has been battered by dwindling foreign currency reserves. In 2017 Zimbabwe’s monthly electricity imports averaged US$16 million, increasing to US$17 million in 2018. 2019 saw a 54% decline in monthly imports, with January 2019 having recorded imports of just US$2 million. October recorded the highest at US$15 million.
On the bright side Zimbabwe has paid off all its debts to Eskom and is now in a position to negotiate for a new deal, Minister of Energy, Fortune Chasi, tweeted on Monday evening. Eskom in the past threatened to cut off electricity supplies to Zimbabwe after its debt reached $33 million. In August 2019 a deal was reached for partial payments of $890 000 per week towards the settlement of the debt. Focus now turns to Cahora Bassa which at one point was owed US51 million.
EQUITY AXIS NEWS