Zimbabwe

Power cuts strangle Zim businesses

2011-01-11 09:26

Special Report

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Harare - The little shop is lit by a single candle propped on the counter as shoppers step into the murky light out of the pitch-black darkness on the outskirts of Zimbabwe's capital.

It is a familiar scene for the shopkeeper: yet another blackout as the country's state electricity provider buckles under demand and pulls the plug to ease pressure on the overloaded power grid.

"It's almost about 12 hours a day. Maybe it's four times a week," said the 21-year-old of the power cuts.

"It affects us very much in business because customers cannot see our products that we are selling."

From forced silences on factory floors to hotel restaurants cooking on open fires, industry says the unstable power supply is crippling attempts to claw back from years of economic ruin.

"Its a killer," said Joseph Kanyekanye, president of the Confederation of Zimbabwe Industries.

"We used to cry about the policy environment. But certainly the power issue in my view is the most critical issue of our time - we need to deal with it."

Increase in demand

Zimbabwe's power stations were built in the 1950s by its British colonial rulers and designed for a smaller population, with little capacity added since independence in 1980.

Current capacity is around 1 200MW, including imports, but the need is up to 2 200MW. Finance Minister Tendai Biti said in November that the 2011 budget set as target raising power generation to 1650MW.

Demand would likely reach up to 3 000MW if unhindered electricity were available, estimates Fullard Gwasira, spokesperson for the Zimbabwe Electricity Supply Authority (ZESA).

"The gap is obviously widening because the economy is not static," Gwasira told AFP.

"We are now witnessing an upsurge as the economy is now starting to recover - there is a huge increase in terms of demand which is not matched by capacity."

The utility uses load-shedding - cutting power supplies to certain areas - to ease network pressures, a policy that will continue until output is boosted.

Independent power producers

"We are introducing new capacity, it might not totally extinguish the demand but definitely new capacity is going to be introduced," Gwasira said.

The main Hwange coal-fired plant and Kariba hydro power station are getting a 900MW capacity boost that will cost up to $800m, he said.

Independent power producers are also being explored but Gwasira said a stumbling block was low power tariffs of 7.5c per kilowatt hour - against a regional average of 12.6c - which locals already find a strain.

Other options are direct energy imports with a ZESA tolling fee and offering consumers an uninterrupted supply at a premium, which has attracted few takers.

Zimbabwe has seen relative stability since 2009 due to a power-sharing government between President Robert Mugabe and Prime Minister Morgan Tsvangirai.

Timely interventions

The adoption of the US dollar to replace the country's inflation-decimated currency was seen as pivotal in restoring economic confidence.

"Yet despite strong growth forecasts - 9.3c for 2011 according to Biti - Zimbabwean industry has been operating on average at 33% of its potential output."

"There was growth in 2009 but I think right now you run the risk of people losing the faith that you can actually sustain this growth if there are no timely interventions," warned industry group president Kanyekanye.

"Power and other utilities are enablers for this economy. So if you don't deal with those then the exuberance...that came through dollarisation, with the new government, with peace and so forth, may easily go away."

- AFP

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