Business Reporters
THE Zimbabwe Electricity Transmission Distribution Company is now “better positioned” to borrow to finance capital projects and guarantee security for power imports due to improved revenue collection as 88 percent of domestic and small business customers are now paying for electricity upfront, managing director Mr Julian Chinembiri said. He said theprepaid metering project had positively impacted on the company’s cash flows.
Since the launch of prepaid metering system in August 2012, prepaid sales of electricity have amounted to over $307 million, Mr Chinembiri said, averaging about $22 million per month.
“The company is now better placed to borrow money for projects from financial institutions to improve service delivery. The prepaid revenue inflows are being utilised to support loan repayment plans,” Mr Chinembiri told The Herald Business this week.
Mr Chinembiri added that the project had also improved the security of power imports and local supply as most of the domestic power is now being paid for in advance.
Zesa Holdings is already discussing with Hydro Cahora Bassa of Mozambique to tie up a power purchase agreement for supply of 100 megawatts. Mozambique currently exports 50MW to Zimbabwe on a non-firm contract and Zesa is seeking to secure a 100MW firm contract for next year. The deal is meant to minimise frequent load shedding characterising the entire country due to limited generation capacity.
Zesa, the parent company of Zimbabwe Power Company and ZETDC, also requires substantial capital to increase power generation through upgrading the transmission systems.
Mr Chinembiri said the prepaid platform has helped the company in managing domestic debt. The old debt is loaded into the prepaid meter and is recovered at the rate of 25 percent of prepaid voucher purchases. This is equivalent to about $4 million per month. To date a total of $40 million has been recovered from the domestic debt.
“Customers have also been empowered to manage their electricity costs,” he said.
He said a recent survey had shown that nearly all customers were spending less on electricity than in the past. On average, customers have cut back usage by about 27 percent.
“The installation of prepaid meters has contributed to reduced load shedding as most customers have cut back their usage by about 27 percent,” added Mr Chinembiri.
ZETDC completed the first phase of the prepaid metering project on September 30 with 505 000 meters having been installed since the project was launched in August 2012. However, some houses earmarked for the first phase are still to have prepaid meters installed as they require alterations to separate shared service connections.