ZESA allocates $50 million of $210 million Afreximbank loan to power imports

HARARE – ZESA Holdings has secured a US$210 million loan facility from Afreximbank to modernise the country’s ageing power network – but questions are being raised over the decision to allocate US$50 million of the money towards power imports.

The facility, announced on Wednesday, is earmarked for upgrading the transmission grid, rolling out smart meters, and addressing the scourge of vandalism.

ZESA says US$5 million will go towards upgrading the SCADA system to improve monitoring and control, while the bulk of the money will strengthen infrastructure and improve efficiency.

But critics say dedicating US$50 million to electricity imports is a short-term fix that fails to address Zimbabwe’s underlying generation deficit.

On Wednesday, ZESA subsidiary the Zimbabwe Power Company (ZPC) reported that the country generated 1,434 MW against a national demand of about 1,800 MW – leaving a gap of roughly 366 MW.

Energy experts argue that the US$50 million could have been better directed towards expanding domestic generation capacity, particularly at Hwange, Kariba or in new renewable projects, rather than paying neighbours Mozambique and South Africa for power that may not always be reliably available.

“Imports are a band-aid solution,” one energy expert told ZimLive. “When you spend scarce foreign currency on electricity from outside, you’re not fixing the system. We should be investing in generation capacity so that the gap is closed permanently. Otherwise, in a year’s time, we’ll still be importing.”

ZESA, however, insists that stabilising supply in the immediate term is crucial to prevent blackouts, particularly to support farmers during the planting season.

Officials also point out that vandalism and a fragile transmission grid continue to undermine reliability, making imports a necessary buffer until major rehabilitation projects are completed.