Transparency Concerns Arise Over ZESCO’s $160M Debt Write-off to Maamba Collieries Limited
In a recent development, Maamba Collieries Limited (MCL), Zambia’s largest coal mine and the leading Independent Power Producer (IPP), remains tight-lipped regarding the controversial $160 million debt write-off extended to them by the state-owned power company, ZESCO.
This write-off, following a lengthy period of dispute and negotiation, has raised eyebrows and sparked speculation about potential corruption and overbilling.
The debt between MCL and ZESCO had ballooned to over $600 million by 2021, as ZESCO disputed the charges, leading to prolonged negotiations.
However, a recent statement from ZESCO’s Managing Director, Victor Mapani, revealed that Maamba power plant agreed to waive $160 million from the outstanding debt, bringing it down to $250 million.
This decision has triggered suspicions about the circumstances surrounding the accumulation of such a significant debt and the subsequent write-off.
Questions have been raised regarding the lack of transparency surrounding the debt write-off, with concerns that Maamba may have intentionally inflated the billing, or that corrupt practices may have been involved.
Despite attempts to seek clarification from Maamba’s corporate affairs office, no official statement has been issued, as the country director, PJ Sudhir, is reportedly out of the country.
This debt write-off is not an isolated incident, as ZESCO has recently settled disputes with other IPPs, including the Itezhi Tezhi Power Corporation (ITPC), resulting in substantial write-offs.
Last year, Maamba’s dispute with ZESCO led to operational shutdowns, exacerbating the country’s power supply challenges and causing widespread load shedding.
While ZESCO has been commended for reducing its debt to IPPs from over $1.8 billion in 2021 to approximately $583 million as of January 31, 2024, concerns persist regarding the transparency and accountability of such agreements.
Maamba Collieries Limited operates a 300 MW coal-fired power plant, supplying a significant portion of Zambia’s electricity needs.
The company is primarily owned by Nava Bharat Singapore Pte. Ltd (65%) and ZCCM-IH (35%), with substantial investments made since 2010.
The power generated by Maamba is sold to ZESCO under a power purchase agreement, highlighting the critical role of transparency and accountability in such transactions.
As stakeholders await further clarification from Maamba and relevant authorities, the need for transparency and integrity in the energy sector remains paramount.
