26 February 2013 – Zimbabwe electricity supply authority (Zesa) says it has started paying a US$70 million debt to Zambia, payment of which will enable the two countries to embark on the joint 1,600 MW hydroelectric Batoka power project. Zambia and Zimbabwe have started preliminary work on the project, which will have an estimated cost of US$2.5 billion. The power plant is expected to be built and operated by a private company for a period of years before transferring ownership to the two states.

Zimbabwe Electricity Supply Authority (ZESA) chief executive officer Elijah Chifamba says the debt was incurred when Zimbabwe sold off assets of a disbanded power firm jointly owned by the two countries to run hydro-electric plants at the Kariba Dam.

“Zambia needed to see first that we were committed to settling that debt and to demonstrate that we are bona fide partners before they could actually enter into the Batoka project. Because we have done so, that has unlocked the project,” he says.

He says Zimbabwe will have paid US$40 million to Zambia by the end of March 2013. Zesa, which is owed US$740 million by non-paying customers, has been struggling to raise long-term finance to fund its projects. The company has, however, cleared US$100 million in debt for importing power from Mozambique’s Hydroelectrica de Cahora Bassa.

Zimbabwe is facing severe power shortages that have led to frequent electricity outages. Businesses and companies, particularly those in the mining and manufacturing sectors, have said that they are incurring huge costs in powering up operations through high voltage diesel generators.
The new Batoka power plant will be situated along the Batoka gauge, about 50 km downstream of the Victoria Falls. Zimbabwe and Zambia will each draw 800 MW from the power plant.
Zimbabwe presently generates 1,000 MW, which experts say is only half of the power that the country requires.