One of Zimbabwe Electricity Supply Authority (ZESA)’s key power supplier ESKOM has suffered a major financial loss which is likely to see screws being tightened on the country following an outstanding $20 million debt which has taken long to settle, Zim Morning Post has learnt.
South African media reported Tuesday that Eskom posted a R20 billion loss (US$1,5 million) in this quarter.
The recent loss is the biggest in the history of the company after 2.5 billion rand which was recorded in the same period last year.
This poor performance has negative implications on the business relationship between the two power utilities as it means Eskom might demand advance payment from ZESA.
Government paid $10 million to Eskom last month in its efforts to clear the ballooning debt.
Sources said Eskom technical team that met with their local counterpart made it clear that ZESA must fulfil its financial obligation before fresh agreements are entered into.
‘Eskom is also facing power challenges and its finances are not in order so the technical team suggested that ZESA clear off the debt and going forward they have to make advance payments.
“However, this arrangement might scuttle the diplomatic relations between the two countries hence some points of agreement were relaxed to maintain bi-lateral relations,” said our source.
The company (Eskom) depends on government support to remain solvent and now has a debt of 500 billion rand.
Recently ZESA team that was dispatched to negotiate for a payment plan came back empty-handed after they were told to pay their debt first, before the power supply is restored.