Mozambique’s power utility company EDM has cut electricity supply to ZESCO over the past seven months, to recover a $100 million debt.
Geta Remigio Manuel Percy, EDM’s director of Economy and Finance told Zitamar News that EDM stopped supply to ZESCO last December for lack of payment after debts which totaled to 8 million in 2015 rose to 109 by the end of 2016.
However, ZESCO is still receiving 100MW of electricity from the floating power ship in Mozambique’s port city of Nacala run by the Turkish company Karpower International
Electricity from the ship is sold under a tripartite agreement between Karpower, EDM and ZESCO, which is separate from EDM’s other bilateral trading agreements with ZESCO.
ZESCO pays Karpower directly for the power and EDM a fee for transporting the power.
Reports indicate that ZESCO is managing to make some payments to Karpower, even if its accounts are not completely up to date.
Percy revealed that Mozambique has presented Zambia with a payment plan, adding that new supply to ZESCO would be dependent on the outcome of the discussions and approval of a new supply contract.
The upward spiral debts for ZESCO and other customers continue to bleed EDM whose key stream of income remain electricity exports to the Southern African Power Pool (SAPP) – an international grid connecting SADC countries.
The company has made up some of the loss of income following the power supply cut to ZESCO through short-term contracts with other buyers.