Zisco pays off $40m Zesa debt
DEFUNCT steel manufacturer, Zisco, has paid off a $40 million debt it owed the country’s power utility, Zesa after securing a loan from the Industrial Development Corporation of Zimbabwe (IDCZ) recently.
In November last year, Zesa disconnected power supply to Zisco over a $40 million debt leaving the Redcliff-based steel plant relying on expensive diesel-powered generators.
Redcliff Municipality and ZimChem Refiners, a subsidiary of Zisco were also affected by the disconnection as they share the same electricity grid with the steel producer.
In a recent interview, Zisco group chief executive officer, Dr Farai Karonga said the company had to secure a loan from IDCZ to settle the debt.
“We were bailed out by the Industrial Development Corporation who loaned us the required $40 million which we deposited to Zesa.
The money had been accrued over a long period of time and something had to be done hence we took the route of a loan.
We felt we needed to break the vicious cycle,” he said.
“We are now working on the modalities of seeing how much can be paid by Redcliff, ZimChem and ourselves.
As you may be aware, Redcliff used most of the power which they use to pump water to the residents, translating to about 70 percent,” he said.
ZimChem accounted for about 20 percent of the power with Zisco accounting for the remaining 10 percent.
He said they were yet to be connected since they were working on separating the grid so that each entity can be charged separately.
“They are in the process of separating the grid so that Redcliff, ZimChem and ourselves can be charged separately.
Each entity can now stand on its own and be able to pay for their own power,” said Dr Karonga.
The process is expected to be completed in a month’s time.
Meanwhile, Dr Karonga said the development may come as a boost to ZimChem who are supposed to start producing chemicals used in road rehabilitation.
“As you may be aware, ZimChem was given a contract by the Government to supply tar for road refurbishment under the Emergency Road Rehabilitation Programme (ERRP) 2.
“So, the disconnection had negatively impacted on the production since they could not produce as they were relying on generators like us,” he said.