Hidroelectrica de Cahora Bassa of Mozambique and Eskom, South Africa, have refused to renew power contracts with the Zimbabwe Electricity Supply Authority over the non-payment of long standing debts. Both Eskom and HCB have allowed debt extensions in the past but are now demanding that ZESA repay current debts before any new deal can be signed. Zimbabwe imports about
35 % of its electricity, and its principal utility is reportedly $51 million in debt to the two suppliers, seemingly unable to extricate itself from its financial morass. The country is facing a hard currency crisis and its international credit rating has been reduced to junk status.
Eskom’s change of mind in particular has interested analysts, who believe that the utility’s tolerance of ZESA’s debts is a strategy aimed at forcing it to swap debt for some equity in Hwange power plant, one of two plants supplying two thirds of Zimbabwe’s power. The plant may become available if the public sell-off stalls, which is a reasonable expectation given Zimbabwe’s stuttering privatisation process.
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