Eskom’s hunt for more power may risk Zimbabwe import deals

Eskom Holdings SOC Ltd., the South African state-owned power utility, is looking to replace Zimbabwe as an importer of electricity from Mozambique and Zambia to help ease rolling blackouts.

Zimbabwe’s contracts with Mozambique’s Electricidade de Mocambique and Zambia’s Zesco Ltd. are set to expire at the end of the month, according to Sydney Gata, the executive chairman of the country’s Zesa Holdings Ltd. Zimbabwe is failing to pay the $6.3 million monthly import bill to Zambia, he said. A sub-optimal tariff charged by Zesa to consumers means it’s unable to generate enough foreign currency to meet its obligations.

Eskom is now “putting pressure” on the Mozambique and Zambian utilities to take over the contracts, Gata said.

“Zesa now has up to July 31 to draw the supply or else the contracts will be cancelled and the supply re-allocated to other utilities,” he said in a letter to miners. “Zimbabwe will stand to lose heavily as these contracts are long term and at a competitive price.”

Eskom, which supplies almost all of South Africa’s power from coal-fired plants, has subjected the country to intermittent outages for more than a decade because it can’t meet demand. President Cyril Ramaphosa said this week the company will turn to its neighbors to purchase surplus power, one of a number of measures designed to ease the crisis.