The Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a subsidiary of ZESA Holdings, was the beneficiary of a US$110.4 million loan from Afreximbank. The loan which was the largest part of a total allocation of US$188,600,000 to three other local companies (CABS, CBZ and ZB Bank) was confirmed at the Intra-African Trade Fair that happened in Durban this week.
The funds that ZESA secured will be aimed at improving revenue collection through more prepaid meters.
“The funds will help ZETDC to improve revenue collection through smart meters and prepaid meters and thus pay off regional creditors’ accounts,”Afreximbank (via newZWire)
ZESA has, over the years, struggled to get money out of postpaid clients who are absconding their obligation. In 2019 the power utility was owed around ZWL$1.2 billion by various stakeholders which forced the company to, over the years, ramp up efforts to spread prepaid meters across the country.
And at this point, you’d be quite right to ask if any of that money will be used to improve the ageing electricity infrastructure in Zimbabwe. Well, according to a report by newsWire, Afreximbank Executive Vice President Denys Denya said that part of the credit facility would be put to the task of rehabilitating the ZESA plant in Mutare.
That being said, putting revenue collection on par with the rehabilitation of infrastructure makes sense because ZESA will at the very least be able to recoup money from more of its clients. This will mean that the power utility will be able to better settle the over US$100 million it owes its sister power companies in the region.
It will be interesting to see how this all pans out when the funds from ZESA’s Afreximbank loan are put to purpose.
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