Zambian Govt to help ZESCO settle the over $400 million dollars owed Maamba Collieries Limited
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.
