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Thursday, November 18, 2021

Government to help ZESCO settle the over $400 million owed Maamba Collieries Limited

Economy Government to help ZESCO settle the over $400 million owed Maamba...

Energy Minister, Peter Kapala has said that government will facilitate a debt restructuring system to enable Zesco to dismantle over 400 million dollars it owes Maamba Collieries Limited.

Mr. Kapala told journalists in Maamba today after touring Maamba Collieries Limited that Zesco has continued accruing the debt because it is currently only paying about 40% of the dues to Maamba Collieries Limited.

The Energy Minister explained that Maamba Collieries Limited is looking at a guarantee that Zesco will settle the debt once the power utility company has raised enough money.

Maamba Collieries Limited Chief Executive Officer, Venkat Shankar said the thermal power company is happy that the government is looking for a solution that will be sustaining to both companies.

He said the company believes in co-existence to best offer services to the Zambians.

Last week, the Energy Minister told Parliament that ZESCO was owing US$3.5 billion as of September 2021. In a ministerial statement to Parliament on ZESCO’s debt position and measures being put in place to improve the utility’s financial position, Mr Kapala said that ZESCO’s debt was largely due to costly emergency power imports and increased use of independent power producers generated power which is at a higher tariff.

Mr. Kapala said that the imported power was procured at triple the price of ZESCO’s average electricity selling price and that the differential was not passed on to customers through an upward tariff adjustment, adding that ZESCO currently buys power from independent power producers at an average tariff of 11 cents per kilowatt-hour and sells the same at 7 cents per kilowatt-hour to its customers.

Mr. Kapala said that ZESCO owes independent power producers such as Maamba Collieries, Ndola Energy and Itezhi tezhi Power Corporation $1.1 billion in unsettled dues for power supplied to the utility.

Mr. Kapala further told parliament that ZESCO made a loss of $432 million between 2018 and 2020 as a result of the Kwacha’s depreciation against the US Dollar and that the utility company makes losses whenever the Kwacha depreciates against the US dollar.

Mr Kapala stated that ZESCO has embarked on a turnaround strategy to improve its financial position which seeks to stabilize, recover and improve the company’s financial performance during the period 2021 to 2025.

22 COMMENTS

  1. I hope all the Directors are fired as you can’t restructure a company with the selfsame wasteful managers.

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  2. Oohhh dear……..

    The revelations of the extent of the rot that corrupt fraud convict moron lungu left keeps getting worse every week……….

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  3. Honorable Minister: How about a brief summary of the turnaround strategy? Those written decision memos need to start showing up in the media.
    And how is buying at 11 cents and selling at 7 cents sustainable? Lets create those jobs so people can afford the inevitable doubling of power cost for domestic consumption at some point. And somebody needs to get the courage to start explaining to citizens that out of control subsidies are a burden on economic growth. It will be near impossible to get free education running things like that.

  4. as we move forward, how much is ZESCO buying power from this Company? I think that it is very important that we know about the tariff differential as somebody above has mentioned. It is not right for investors to milk Zambians by making quick turnaround on their loans at the expense of a country that has given them the opportunity to do business. I hope that this is not the case.

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  5. This Minister of Energy seem ok, okay with everything at ZESCO. HOW COME HE DOES NOT SEEM INTERESTED IN ESTABLISHING IF THE PRICE AT WHICH ZESCO IS BUYING POWER IS EVEN JUSTIFIABLE?? What could have prevented some selfish individuals to negotiate higher purchase tariffs from IPPs with the aim of skimming off some monies on top of what was really justifiable?? IF THE IDEA IS TO JUSTIFY PRIVATISING ZESCO ON BACKGROUND OF POOR FINANCIAL PERFORMANCE WITHOUT SIGNIFICANT AUDITS, THEN THE “NEW DAWN GOVT” WILL BE IN FOR A NEW FIGHT WITH ZAMBIANS,REST ASSURED!!

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  6. Again taxpayers monies being used to bail out irresponsible and reckless individuals …Victor the MD is still reporting in his office everyday, guess what he is doing shredding and deleting any evidence.

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  7. Chipante pante government at work…these guys will bankrupt Zambia beyond repair,,,,Zambia will end up worse than Zimbabwe under baby President HH

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  8. The tradgey is Zambia baths in solar energy almost 330 days of the year ……..

    Free energy …………

    More than 5 years ago We advised that lazy crooked PF GRZ to establish a solar manufacturing industry in zambia, but because there was only hard work and no kickbacks , no one wanted to know……….

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  9. The IMF bailout loan that is imminent, will carry as one of the conditions that fuel and energy subsidies must stop. That means DOUBLING of the Zesco tariffs. Also, Bally has already announced that electricity must carry cost-reflective tariffs. Get solar before it’s too late!

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  10. During pf most of the directors and ceos of these state companies were from Eastern or northern province and not Southern. During this time, they failed lamentanbly. What does this say about these tribes and tongas

  11. Will the new dawn government manage to
    Offset debts everywhere?Bally will continue
    Promising as it looks it’s beyond his range
    To settle all debts.He has an uphill battle as
    Zambians have already started loosing patience.

  12. Saulosi – Zambia is already bankrupt where have you been…where were you when PF govt defaulted? You can not compare the utterly reckless PF govt of incompetent LAZY LUNGU to this govt of HH which is methodical its just premature and very unfair I know you are hoping for that with the terms you employ like “Chimbwi no plan” and “Chipante pante” only someone who has not been following current affairs or ignoring it would use those words.
    I have told you time and time again to take a sabbatical and come back after 6 months!!
    See you in 6 months time in the new year!!

  13. Some foolish PF cadre will say the government has money.
    ZESCO , a parastatal company owes $3.5 billion .The total national debt of Rwanda amounts to only $4.71 billion.

  14. Does the Energy Minister surely expect the current management at ZESCO to execute the turn around strategy?
    I am now slowly but surely beginning to believe this UPND government is not up to the task of governing in an environment of real change. Change management…. thelizno

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  15. The corrupt PF government was only interested in winning the election, and for that purpose they could not afford any loadshedding to take place. Therefore they had to import expensive South African power, and have Lake Kariba being emptied at a faster than normal rate. Not only did PF lose the election, they left us with vast unpaid bills, and the impending prospect of extensive loadshedding. Remember Edgar China Lungu promising “no more loadshedding”? Well, he was LYING.

  16. Using post paid and fixed charge systems helped sustain ZESCO recklessness. Since the introduction of the prepaid system ZESCO has struggled. This just shows that people were being robbed.

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  17. flag Tarino Orange October 18, 2021 At 8:49 pm
    QUOTE’ During pf most of the directors and ceos of these state companies were from Eastern or northern province and not Southern. During this time, they failed lamentanbly. What does this say about these tribes and tongas….END OF QUOTE ‘ ….ONE OF THE MOST STUPID AND RECKLESS COMMENTS I HAVE EVER READ ON SOCIAL MEDIA. You are encouraging tribal voting and you know that if this rant goes on from people like you, and if people follow you, it means come 2026 UPND being a Tonga partY like you imply, will not win because the other tribes have always outnumbered Southern,Western and N-Western. STOP THIS TRIBAL RANTING FOR ONCE TARINO. People that voted for HH where not only Tonga, but from across the country. This is one Zambia and one…

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  18. We know that Independent Power Pools are source revenue and Financial risk for utilities like Zesco if not well aligned in market structures and Power Purchase agreements Including offtake This needs to be reviewed to protect similar amounts in power purchased from those expensive forms of generation of power and operations in pass thru tariffs to Zambians The cost of LCOE has continued to fall below the
    ones being charged in Zambia Zesco Itself has invested well and generates effectively its power in those installed capacities now and must simply act as a HUB in the regional and local Zambian Power market to trade control and settle power contracts in futures and…

  19. And for the record, Zesco is in problems because they borrowed to build all these new power stations, and if they had not done that, the problem could have been worse by now. Remember when FTJ was ill-advised during privatization,he sold mines and other industries without matching investments in power generation,. One big machine for the mines needs an entire towns electricity consumption and this was left to PF with its political will to do it, to go out and borrow money to invest in these power dams. So you see where the money went? No wonder the Energy Minister has not out rightly condemned Zesco in his speech because he has looked at the facts unlike some of you who are just ranting. PF you are gone but we always remember you for your political will to move things! Some moron says…

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  20. #21 PF yes PF may have been bad but had the political to tackle what the MMD were afraid to do. Like low availability of electricity…. people want to blame this on PF but truth is this started way back in MMD time… I remember taking work home hoping to finish it there but only to find the whole township had no power. I went to Zesco to inquire what the problem was and was told they were rationing supply. This was during Mr Mwanawasa’s last days in office.

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