Power Utility Spent $46.1m Servicing Debt in 2024

Power Utility Spent $46.1m Servicing Debt in 2024

ZESCO Limited paid a total of US$46.1 million toward servicing its debt obligations in 2024, according to figures contained in the company’s latest annual report.

The disclosure places renewed focus on the financial pressures facing Zambia’s state-owned electricity utility, which continues to manage legacy debt while sustaining power generation, transmission and distribution operations nationwide.

The annual report outlines that the debt servicing costs were incurred as part of ZESCO’s existing loan and financing arrangements, entered into to support infrastructure development, power generation expansion and network upgrades over previous years. The report indicates that debt obligations remain a significant expenditure line for the utility, affecting cash flow and operational flexibility.

ZESCO’s debt portfolio comprises both external and domestic financing, accumulated through various power projects and system investments aimed at meeting growing electricity demand. These include generation facilities, transmission lines and rehabilitation of ageing infrastructure across the country.

According to the report, debt servicing in 2024 formed part of ZESCO’s broader financial management strategy, which prioritised meeting repayment schedules while maintaining operational continuity. The company reported that loan repayments and interest costs were met in line with agreed terms during the year under review.

The report further shows that ZESCO continued to operate within a challenging financial environment marked by high operational costs, currency exposure on foreign-denominated debt and ongoing capital requirements for power system stability. These pressures persist against the backdrop of increasing demand for electricity from households, mining operations, agriculture and industrial users.

ZESCO’s financial position has remained under scrutiny in recent years due to its central role in Zambia’s energy sector and the wider economy. The utility’s performance has direct implications for industrial productivity, mining output and household access to reliable power.

The annual report notes that despite the debt burden, ZESCO continued to supply electricity across the country while undertaking measures to stabilise its operations. These included efforts to manage operational expenses, improve revenue collection and engage with stakeholders on long-term financial sustainability.

The report does not indicate any default on debt obligations during the year, stating that payments were made as scheduled. However, it acknowledges that debt servicing continues to place strain on available resources, underscoring the importance of financial discipline and strategic planning.

ZESCO’s debt servicing profile has been shaped by past investment decisions aimed at expanding generation capacity and strengthening transmission infrastructure. While these investments were designed to support long-term energy security, they have also resulted in substantial repayment commitments.

The report highlights the need for sustained reforms within the energy sector to balance infrastructure development with financial viability. It also underscores the importance of policy coordination, cost-reflective tariffs and improved efficiency to support the utility’s financial position.

ZESCO remains a key institution in Zambia’s energy landscape, with its financial performance closely monitored by government, industry players and consumers. The disclosure of the US$46.1 million debt servicing figure provides a clearer picture of the scale of obligations the utility continues to manage.