Home Economy Government to Pay $20 million to Maamba Collieries Limited for ZESCO...

Government to Pay $20 million to Maamba Collieries Limited for ZESCO Arrears next week-Finance Minister

Maamba collieries thermal power plant engineers captured busy working in the 300 mega watts power plant.
Maamba collieries thermal power plant engineers captured busy working in the 300 mega watts power plant.
Maamba collieries thermal power plant engineers captured busy working in the 300 mega watts power plant.
Maamba collieries thermal power plant engineers captured busy working in the 300 mega watts power plant.

The Ministry of Finance is next week expected to pay 20 million United States dollars to Maamba Collieries Limited.

Finance Minister Bwalya Ng’andu says the money is meant to dismantle outstanding arrears ZESCO owes Maamba Collieries Limited for power.

Dr. Ng’andu was speaking in an interview today shortly after touring Maamba Collieries Limited with Energy Minister Matthew Nkhuwa.

And Mr. Nkhuwa has refuted media reports that Maamba Collieries has stopped supplying power to Zesco due to outstanding bills.

Mr. Nkhuwa clarified that the damaged tubes in the boilers at Maamba Collieries are the major cause for the halt in electricity supply and NOT outstanding arrears.

He said the Management at Maamba Collieries has assured government of its commitment to repair the damaged tubes as soon as possible.

The energy minister said once repaired, power supply will be restored from the current 1-hundred and 50 megawatts to 3 hundred.

Meanwhile Maamba Collieries Chief Executive Officer Venkat Shankar said the company has a good working relationship with government and will do everything possible to repair the damages at the thermal power plant.

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  1. Zambia one one can wake up and say anything whether truth or not. Previous day Maamba colliery on Hot FM said the government is owing the company money and that has caused the companies to fail to provide power .
    Today Mr.Nkhuwa is refusing the claim . He is says that load shedding is as results of damaged tube. Who is saying the truth here….!!!!!!!

    • Mr Nkhuwa, perhaps that damage to the tubes was due to lack o funds for maintenance which in turn was due to Zesco owing them

    • And some one wants to close our internet down or arrest those on social media. But it social media which kicked Ngandu and Nkuwa in the balls to go and pay Maamba Collies, after giving free money to Eskom.
      Get back atleast $30 million from the $40 million you PF gave free to South Africa who has no electricity.

    • Imwe mwe bantu 20 million dollars is not a lot of money. It can only cover for power for about 28 days. Power is measured in Watts, Kilowatts, MW. If you leave a 100W bulb for 10 hours the energy used (not power) is 100W x 10hours =1000Watthour or 1 Kilowatt hour or 1 ZESCO unit. The energy produced by the 300MW or 300,000KW power plant in a day (24 hours) is 300,000 x 24 hours = 7,200,000 Kwh or units. Now ZESCO buys this unit at 10 cents or $0.10 The cost of this energy is 7,200,000 x 0.1= $720,000 per day. Now for 28 days this energy would cost $720,000 x 28 days = $20,160,000 which is a 28 day credit.

    • For goodness sake, let ZESCO run profitably by allowing it to charge rates that make economic sense!

      I mean, how do you expect a company like ZESCO to survive or not owe subsidiary electricity suppliers (like Mamba) if they keep selling electricity at subsidized rates especially to the mines? What business sense does this arrangement make?

      And you Zambians, including so called Opposition Parties shouldn’t be surprised when you hear that Govt can’t afford to pay or is in arrears for some of these services. Because you are the same people who moan and b!tch loudly every time any rate increases are proposed by the Govt. Even foreign corporations who can easily afford to pay a little bit more for such services without even making a dent in their bottomline have learned the…

    • Continue….

      Zambian habit of wanting VAMAHALA (free stuff) from Govt. And now we are surprised that ZESCO is failing to settle Bills?

      Quite frankly, there is no reason why ZESCO should be struggling to pay Bills on time. The problem is obvious. And unless our attitudes towards wanting and expecting from Govt “free or cheap” things/services that are not COST REFLECTIVE change, entities like ZESCO will forever be struggling scenario no matter who is in power.

    • Ba Yambayamba. The minister of energy during the Sunday interview explained that ZESCO buys the unit at 10 cents from Maamba and sells it to the domestic consumer at less than 5 cents and continues going down with the depreciation of the Kwacha. The mines pay in dollar equivalent at less than 10 cents almost the same price as from Maamba.

    • @Senior Engineer RTD, I am confused. Are you disagreeing with my statement or simply interested in repeating what the minister said?

      Anyway, if ZESCO buys electricity from electricity suppliers to the national grid such as Mamba at 10 cents a unit (as you have stated) and then turn around and sell the same electricity at 5 cents to consumers, how is that not a LOSS to ZESCO? And if ZESCO is not making a loss, then who covers the shortfall (the 5 cents) to ZESCO for them to break even and stay in business? Because I am sure you do understand that that kind of pricing you have highlighted is a LOSS to ZESCO. And if the 5 cents difference is covered by the Govt, isn’t that exactly how a Govt SUBSIDE looks like?

      By the way, if the mines are paying 10 cents (or less) a unit,…

    • Continue…

      isn’t that simply a BREAK EVEN Price to ZESCO who eventually have to bear costs such as transmission, maintenance, salaries, extra? And how does that make any business sense to you? And what company/business would stay in business operating this way? Yet we expect ZESCO to do all sorts of things, like improving their infrastructure and expanding coverage, when we keep insisting they operate like a CHARITY….good luck!!!

    • @Yambayamba. I could not have said it better myself. The tariff as it stands now using the minister of energy’s figures is UNSUSTAINABLE. It is another mealie meal coupon scenario.

    • If ZESCO pay for electricity in dollars and the exchange rate makes it unfavarable to ZESCO , is it the fault of the public or GRZ that the kwacha is sliding South against the dollar ????

  2. Heads must roll. This kind of ineptitude can’t simply go on. How can a going concern, which is profit making and a monopoly, owe huge sums of money? Why is Zesco not being taken to task? The rot in this country is unbearable! This is failure of the highest order. Mr President sir, fire those nincampoops at Zesco and shake up the supervising ministry. Why is it so difficult for there to be action? The maamba colleries case has nothing to do with climate change but has everything to do with management failure.
    Mr President, your goodness is what is pulling you down. Leadership is not a popularity contest, it is the ability to make the tough calls. Make those tough calls and show leadership!!!!

    • This is what I fail to understand! Why should MoF pay bills on behalf of ZESCO, when its that received the power and sold. What has happened to the proceeds of the power sold?

      Something is wrong with our national accountability.

    • And you forget that you are the same people who b!tch and moan every time ZESCO/Govt tries to increase rates to a more COST REFLECTIVE level, right? You LOVE Govt SUBSIDIZED electricity and you are asking why Govt is settling bills on behalf of ZESCO a Govt run entity/corporation? What do you think SUBSIDIZING something by the Govt mean? This is the kind of WILLFUL IGNORANCE that is dangerous!

    • Parliamentary select committee on energy where are you? You are supposed to be in the forefront of turning the heat on Zesco. Zesco’s enormous expenditure needs serious scrutiny, the amounts being spent are not reflected in it’s service delivery. What is wrong, is political interface hampering efficiency and development to an extent that we forget that it is a strategic company?

  3. We said it,Maamba just held back its generation due to owing arrears!! And this Nkhuwa thought the tubes are a reason? If they haven’t repaired them is coz they just want something to point at,PAY THEN AND POWER WILL FLOW.”WHEN YOU PAY IT WILL SHOW!” So then,why proritise payment to Eskom for promissary electricity instead of putting priority on Maamba a local supplier?? LET US NOT HEAR THAT PEOPLE GOT CUTS AS THEY ARRANGED IMPORTS FROM ESKOM HENCE THE PRIORITIZATION IN PAYMENT!!



  5. Two days ago dora siliya said the government had paid mamba collieries $40 million. I wonder what happened to that payment. Or was it just the usual dora trying to tell people what they need to hear. And today, that LT article is nowhere to be found. I wonder who is in charge of the propaganda machine.

    • IT is ESKOM which was paid $40m. Apparently the electricity is walking on foot to reach Zambia instead of at a flip of a switch.

    • And when that electricity get to Zambia, you the same people insist that it be sold to consumers at SUBSIDIZED prices (which is at a loss.) I am pretty sure ESKOM sold that electricity to Zambia/ZESCO at a cost reflective rate and at a profit. So how we expect ZESCO to survive doing business in this manner is beyond me. And you wonder why ZESCO is failing to settle bills and Govt is broke. This is the VAMAHALA MENTALITY I am talking about!

  6. Had we contracted Japanese power companies in the 90s, none of this nonsense would exist today. No, Zambia opted for China and India. MMD were useless, now PF and UPND are equally useless.

    • Point of correction dude, upnd has not yet had the chance to manage this country’s treasury, so based on that technicality, they are still useful because we have not yet utilized their national economic management potential.

    • Promising free/cheap everything (corn meal, electricity, free college, extra) UPND is equally lying to you! Trust me, for as long as Politicians keep selling lies to Zambian voters in order to buy their royalty and votes, nothing will change even when UPND takes over Govt. And what I have heard and seen coming from HH so far does not give me hope that things will be any different.

  7. poor planning by pf they have all the money to bribe voters during any by election, but they don’t have money to pay for electricity for the betterment of any Zambian. what a shame ba ECL and his team.

    • Someone left upnd in 2001 and joined pf ,according to him upnd is a party of managers while pf is a party of politicians. Very short term goals indeed, now see this economic mismanagement by politicians without long term goals.

  8. We should start asking the right questions on this ZESCO financial situation.

    Nation needs to know how ZESCO utilities it’s income and whose in charge

    • Parliamentary select committee on energy where are you? You are supposed to be in the forefront of turning the heat on Zesco. Zesco’s enormous expenditure needs serious scrutiny, the amounts being spent are not reflected in it’s service delivery. What is wrong, is political interface hampering efficiency and development to an extent that we forget that it is a strategic company?

  9. Nkuwa is the wrong person to run the Energy Ministry! His reasoning is very kokai!
    What caused the loadshedding?
    Is it the tubes or the lack of funds to replace the tubes? Does he understand Root Cause Analysis? Mr Lungu should replace this man! A more honest and competent individual is needed for this sensitive Ministry who should also begin the restructuring of ZESCO! This country has already lost too much in terms of production because of the 18 hours loadshedding businesses have had to endure! Shameful indeed!

    • Ba Mwine Mushi maybe this Nkuwa fellow has never heard of the Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) which states that, for many events, roughly 80% of the effects come from 20% of the causes.

    • You don’t know what you are talking about. Yes Zesco May have no money to pay debts but the one from Maamba was caused by the government. They forced Zesco to sign an agreement based on the fact they will will be assisting Zesco in paying the short on the tariff Maamba charges Zesco. We need to ask Maamba to avail to us how much they are charging Zesco per KWh then you will understand the confusion…

  10. “Mr. Nkhuwa clarified that the damaged tubes in the boilers at Maamba Collieries are the major cause for the halt in electricity supply and NOT outstanding arrears.”
    Any sensible person can see that it is the arrears of course, Maamba cannot buy spare parts or pay their suppliers and contractors because they have no money. Lungu’s ministers yaba!! So what does Nkhuwa think of Dr Ng’andu’s promise to pay Maamba next week? The whole PF leadership is donchi kubeba (lies and secrets) even for straight forward things which a grade seven can see clearly.

  11. Let’s see where Dr Ng’andu will find $20m to pay Maamba next week, otherwise he becomes a donchi kubeba too, if he is not already.

    • I guess the money is from our dollar reserves which means our import cover will decline further.
      Good though that Maamba gets its dues to bring their generation up to capacity before the Escom power deal expires. The next thing we need to deal with is ZESCO itself! It now has to settle its Maamba debt with our treasury. The best time to downsize ZESCO is now. Get rid of excess baggage and for once ZESCO being a Public utility needs to be compelled to publish its financial statements the same way our banks are made to do on a quarterly basis. It’s too much of Kudyelana Masuku Pamitu yama customers! ZESCO has become a bottomless Pit! It does not matter how much money we pump in there. The Problem remains at Corporate Governance Level! The Board and Management at ZESCO needs Surgery, not…

    • The Problem remains at Corporate Governance Level! The Board and Management at ZESCO needs Surgery, not Panado! In fact they need to be prosecuted for Economic Sabotage! Scientists in Italy were sent to jail for failing to predict an Earthquake! The same should apply to ZESCO leadership for failing to plan ahead and for killing many businesses!

  12. Zesco was a milking cow so it cannot give any more milk.Let government just sell zesco as the
    New buyers will sort all the mess in
    Zesco.Otherwise they will not milk
    But slaughter the cow.

  13. But you guys, when are you going to pay contractors who are dying of stroke and hunger.Zambian contractors are really suffering.Please, Mr. President do something.

  14. Truth be told ZESCO has been destroyed by government itself by making it a junkyard to take uneducated caders in order to appease them. I have never seen a country in which a monopolistic company fails to thrive apart from Zesco in Zambia. The government used to protect it from any investor who wanted to invest in energy before and now the same government has destroyed it by making it a dumpsite or sweet potato field for their caders. Zesco has no money because PF spent it on election campaigns. You can increase the tariffs a hundredfold but still yield no results because of the incompetence of government and ZESCO management. How government institutions owe zesco money?, how many government institutions owe water and sewage money? Government media is dying too because the government…

  15. The cost of energy would be lower if we had by now developed solar and wind power. Even if Zesco charges ‘economic’ rates, I bet you the monies will end up in in huge salaries, perks, allowances for the top managers and PF party machine.

    It’s about having the right people at Zesco and a political will to invest in sustainable energy. Currently, you can’t distinguish Zesco management from PF cadres

  16. Some one said ,

    Even if you have a group of lions that are lead by a sheep, they can still be defeated by group of sheep lead by a lion…..

    In other words it is leadership…….or lack of leadership that tells……

    Lungu has absolutely no clue and seems be be drowning in corruption scandels up to his neck…

    Look at Rwanda, a country with virtually no minerals ……

  17. I am surprised how the whole debate has shifted from the dry Zambezi river and low levels of Kariba dam to a peanut coal powered maamba. The damage was done by MMD that neglected investment in power generation. While the PF is trying to correct this mistake, there is need to venture into coal plants and other renewable sources of power generation. There are coal powered plants dotted around the country especially in the copper mines they can leverage on.

  18. I am keenly following @Yambayamba’s argument and it is quite sound. We need to get a grip and allow ZESCO to function independently and profitably; we cannot now start using dry rivers and climate change to explain away incompetence. Even in this climate we have professionals who can thrive and manage our assets and resources. The last thing I need to point out is each time “government” pays for something in an interventionist manner, it is the taxpayer who is paying. Is the citizenry really interested in how their monies are being used to prop up incompetence and scapegoating? Nda ta pompano abale!

  19. @ I luv Zed, Thanx for your insight. Explains why no Zesco representation is mentioned. So we now know the culprit. Beats me why we keep making these agreements that clearly disadvantage the country. Same thing with the so called mining investors who get power cheaply but fail to pay fair taxes…wat a curse

  20. I like you analysis and comments retired Engineer but would like you to go a little further and give a view of the Cost of Cleared Imported Power from Eskom for a 300 Mw (is it in the Cost range of USD 58 to 62 Mw SAPP DAM market intra or other)

    Give also a view of the The LCOE of various generating assets , per unit of total electricity generated over an assumed lifetime the used life of an asset ans see the Tariff that should have been over the useful life recoverable as a LRMC tariff.See also why IPP must be subjected to auctioning and bids by regulator ERB and ministry to ensure that consumers do not take on those 10 cents expensive source of power when they should…

  21. (Utilities generating effectively within the global benchmarks costs ) be benefiting from effective and efficient means of generating power when technologies and transmission services have been failing plants IPPs for such tariffs pricing have been a source of drainage for power utilities like Eskom and Zesco should be protected to maintain its operative efficiencies in Pricing including Financials

    Give the Cost per MW of 300 and what is the Lowest and Highest Tariff for say Hydro Technologies generating power Plants and see how LCOE is used in present values to recover cost of evacuating power to an offtaker like Zesco and what costs in the tariffs (maamba 10 cents) must be…

  22. must be acceptable

    Your calculation on those tariffs is correct but the tariff picked is expensively noncompetitive(overpriced) that is why in latest IRP are phasing out such expensive generation methods and instituting regulatory oversight to ensure customers and utilities in those IPP arrangements are not exploited You can see it from eskom transition towards low cost cheaper and carbon power plants

    The cost structure and tariff must be bench-marked and see in the global to local and technologies and best price picked By nature power plants and costs are long-term Investments and cannot be simply charged to customers without bench making to ensure the are competitive so…

  23. anything above 10 cents at 90% for such technology at the 300 Mw per head of a Zambia (USD 720000 per day is expensive) The price should be in the price rate of USD 62 x 300 Mw or price range (spread) of 5 cents (Zesco) or 7 Cents Anything above these is noncompetitive and the utility must be referenced and protected to ensure its not in captive as the months in consumed power from mamba or Eskom increases to 6 months or so given exposure So 10 cents of purchased is higher than competitively bidded

  24. The Cost of power is high in Zambia and sub Sahara Africa The thinking of these HIGH tariff is a chase to cover already high cost of Power that makes the cost of doing business noncompetitive so for those new and existing Investments That is why its important to leverage the cost power into the Grid to create that competitive advantage we should not be striving to be so noncompetitive like Solomon highland but better than Algeria and the others Comparing ourselves to some utilities in Sub Sahara Africa is not correct but we should be benchmark against international standards The marginal or average electricity tariffs in Sub-Saharan Africa of nearly 0.5-.12 per kWh, is almost…

  25. twice the in countries in the developing world (competitiveness), higher as much in the OECD countries There is therefore to encourage power trading for price discovery and maintained low prices that are well below costs.The retired Engineer must see the economics in tariffs Cost recovery and affordability for the people AND not apply the assumed tariff of .10 cents per Kwh that is already expensive globally bench marked

  26. So the Retired Engineer must not simply appraise the Tariff based on “controllable and uncontrollable** cost recoveries but see the efficiency ratio over LRMC curves in those effective he will see in the maamba and eskom tariffs (not including wheeling charges) and see the affordability onto the average Zambian in the cost pass through wrong (not fit methodologies)

    Lets work it out better on the tariffs and the cost recovery if we will remain competitive for those FDIs and Investments according to the Easy of Doing Business in that broader context

    • It is quite a mouthful. According to IRENA (International Renewable Energy Agency) the use of renewable power generation technologies has accelerated since 2017 competing fairly with fossil fuel-fired electricity generation (the Maamba Thermal Power Plants of this world). Bioenergy for power, hydropower, geothermal and onshore wind projects commissioned in 2017 largely fell within the range of fossil fuel-fired electricity generation costs according to data collected by IRENA. The global weighted average Levelised Cost of Electricity of new hydropower plants commissioned in 2017 was around USD 0.05 per kilowatt-hour. The global weighted average LCOE of utility-scale solar PV fell 73% between 2010 and 2017, to USD 0.10/kWh. Increasingly, this technology is competing head to-head with…

    • Continued. Increasingly, this technology is competing head to-head with conventional power sources – and doing so without financial support. However, the elephant in the room is climate change, a man induced phenomenon which is making hydropower uncompetitive. Hydropower has been the cheapest source of energy in Zambia and Zimbabwe helped in part by the fact that the eighty million pounds borrowed from the World Bank to construct the Kariba Dam has already been repaid by now.

  27. Sometimes what the RT Engineer should propose is Demand side management or participation to reduce the import or cost of power without further looking at the sensitivities on the Financials (revenue protection due to volumes fallen and the nature of leverage) But to maximize that the system could be in such that a trigger to redirect the loads iin those expensive tariffs could be when at peak or other to manage those expensive high tariffs in volumes of Mw but again its a Zero sum Game In a typical CVP analysis sensitives(taking LCOE of imports procurement or self ), utilities will need volumes at marginal cost for revenue protection Now those tariffs must be competitive .Its important also…

    • On demand side management ZESCO has been advising customers through adverts to switch and save and distributing free energy saving bulbs. It tried to distribute free solar geysers in Mandevu but this appears to have been an election gimmick during the 2011 elections by RB.

  28. Its important also and in the best interest of utilities to remain within costs and maximize volumes Now should the energy sector move towards market based only least cost utilities whose tariffs are competitively so will survive What you have said In this situation Government intervention tru MOF is correct because it can smoothen and reallocate resources in the economy but only in the shorterm 3 to 4 months as we wait for rains and the new build in kafue Gorge lower as we transition the energy mix to rebalance towards other VER renewables away from coal and nuclear

    But energy should be seen as a catalyst in realization of Zambias economics and it should be used as key in…

  29. in “World bank easy of doing business Rankings” Its not a tariff issue along there bench marks and economic impact assessments on various sectors of Zambia to be done as we assure energy security in those IRP(revised to fit IPPs and Zesco) Price(tariff) is a competitive advantage and gains abound far than beyond what the tariffs increment can achieve in the shorterm to long-term in national economic and energy modelling

    The calculations for RT Engineer is correct but the Tariff could be competitively lower than 10 cents or 9 cents from eskom but given the capacities regionally you pay the premium but cannot load over the sectors like that

  30. Mozambique has in the recent past risen to be a net exporter of power since 1998 to countries of potential like Zambia Zimbabwe and South Africa well positioned ,structured and skilled as it where at non-competitive prices
    Well power in the EU and OECD in Tariffs per Mwh is expensive from Italy (USD 174.39 Mhr), USD 357,95 per Mwh in Denmark USD 68.11 per MWh in Norway but these are not competitive prices and reflect power systems and technologies in those areas and not world class So it will be unwise to bench mark these economies and take it as Zambia target cost reflective tariffs Its not global bench mark best practice So anything between 35 USD per Mwh and 68 USD per…

    • South Africa partly funded the construction of the Cahora Bassa Dam in the apartheid era so that it could be importing power from Mozambique.

  31. is the least cost strategy and competitively so for hydro and any bonus given for the tariff by the regular simply adds to revenues

    You can go on and on and discuss the technologies and pricing markets products investments and Financing but ni site yabene Those PPA and hybrid and new methods etc

    Thanks Okay ///

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