ZIMBABWE'S ELECTRICAL WOES

UNCLAS SECTION 01 OF 02 HARARE 000361

SENSITIVE
SIPDIS

AF/S FOR B. WALCH
EEB/ESC
CA/OCS/ACS/AF M. RAUGUST
JOHANNESBURG FOR RCO M. VEASY
NSC FOR SENIOR AFRICA DIRECTOR M. GAVIN
TREASURY FOR D. PETERS

E.O. 12958: N/A
TAGS: ENRG ECON EINT CASC PGOV ZI
SUBJECT: ZIMBABWE'S ELECTRICAL WOES

REF: 08 HARARE 000073

HARARE 00000361 001.2 OF 002



1. (U) SUMMARY: Due to a lack of coal, aging equipment, vandalism,
and general neglect, Zimbabwe's electrical power grid currently
supplies only half of the country's demand. The result is frequent
load-shedding (blackouts) with many rural regions without power at
all. Although the Zimbabwe Electricity Supply Authority (ZESA)
operates a 750 MW hydro-electric plant in Kariba, its nine
coal-burning plants, with a design capacity of 1200 MW, only
generate an additional 200 MW. In a barter deal with Namibia, four
of the coal-burning generators are being refurbished in exchange for
up to 150 MW supplied to Namibia. Compounding the basic lack of
power generation are chronic problems with the country's step-down
transformers, circuit relays, and transmission lines. For the
foreseeable future, insufficient electricity distribution will
remain a significant constraint to Zimbabwe's economic recovery.
END SUMMARY.

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Problem Begins With Lack of Coal
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2. (SBU) ZESA, a government-owned parastatal and sole electricity
supplier in Zimbabwe, has come under increasing criticism for
failing to meet the power needs of the country. David Chikowore, an
electrical engineer with ZESA since 1983, spoke openly about the
utility during a meeting with conoff on April 22.


3. (SBU) According to Chikowore, lack of sufficient coal is the root
reason ZESA is producing only 50 percent of capacity. In addition
to a 750 MW hydro-electric plant at Kariba that is fully
operational, Zimbabwe has six major and three supplemental
coal-burning plants, all of which suffer from an insufficient coal
supply. Hwange, Zimbabwe's principal electricity generating
facility, is comprised of six major coal-burning furnaces. Four of
the six are designed to generate 120 MW and two are designed to
generate 220 MW. The three supplemental coal plants, located in
Harare, Bulawayo, and Munyati, each have a design capacity of 100
MW. Although the nine coal-burning plants have a total design
capacity of 1220 MW, Chikowore said they are currently only
producing, on average, 200 MW. Further, the three supplemental
plants in Harare, Bulawayo, and Munyati have been dormant and
disconnected from the national grid since 2007, all due to a lack of
coal.


4. (U) Hwange is also the site of one of the largest coal mines and
coal deposits in the Southern African region. Like other Zimbabwe
state-run enterprises, Hwange Colliery Company suffers from a severe
shortage of working capital needed to repair and replace worn
equipment. According to MineWeb, a mining news reporting service,
the Hwange colliery is operating at less than 50 percent capacity
and suffers from chronic breakdowns of its heavy equipment.
Unofficial estimates define Zimbabwe's monthly demand at
approximately 400,000 tons, with Hwange supplying less than 180,000.
In 2007, Hwange Colliery estimated a need of USD 60 million to
bring the mine back to normal capacity. According to Chikowore, the
Qbring the mine back to normal capacity. According to Chikowore, the
conveyor belt used to supply coal from the mine to the Hwange power
generators has been collapsed for over a year, and the mine's
principal heavy piece of equipment, its dragline, suffers from
frequent breakdown.



5. (SBU) Further reducing the output from the Hwange facility is an
ongoing refurbishment of its generators. In a USD 40 million deal
brokered between ZESA and Nampower (Namibia's power utility) in
2007, four of the six turbines are being replaced and the
corresponding generators refurbished. As part of the original deal,
cash-strapped ZESA was to repay Nampower by supplying electricity;
initially 50 MW in 2008, followed by an increase to 150 MW over the
next five years. Chikowore said the refurbishment had been delayed
due to ZESA's inability to honor its side of the deal (supply power)
and predicted the refurbishment at Hwange would continue into 2010.

HARARE 00000361 002 OF 002


In addition, Chikowore mentioned that the Hwange refurbishment only
included the four smaller generators, and that the remaining 220 MW
generators remain out of commission, without any prospect of
repair.

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Can't Distribute the Power It Generates
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6. (SBU) Besides not generating enough ower, ZESA is also unable to
equitably distribute the power it does generate. Chikowore
explained that power leaves the main plants at Kariba and Hwange at
330 kilovolts on Zimbabwe's two main grid lines, and then is
stepped-down through a series of transformers, switches, and
distribution lines to 220 volts for consumption. However, this
whole distribution system suffers from years of vandalism and
inadequate maintenance, resulting in large areas without power and
cash-strapped ZESA unable to do anything about it.


7. (SBU) Among the vandalism is theft of the transmission fluid from
the step-down transformers and theft of the timbers used to string
the transmission lines. Chikowore explained that the same fluid
used in the transformers can be used in diesel trucks and machinery.
He estimated that over 900 transformers were in need of service or
replacement in Harare and Gweru alone. In rural areas, the theft of
wood timbers for firewood has caused whole power lines to collapse.


8. (SBU) Chikowore also explained that frequent load-shedding has
significantly increased wear on the switching and isolation circuit
breakers. Designed as a replacement item after approximately 2000
cycles, many of these circuit breakers were experiencing 4000 cycles
every six months. With no money to replace them, he said ZESA was
attempting to repair as many as possible, but admitted the repairs
were crude and did not bring the breakers back to original
condition. In July 2008, a fire completely destroyed a major
substation in Stampford, a suburb of Harare, which left much of the
city without power for a month. Chikowore said the fire was caused
by a simple overload that should have been isolated through the
protective circuit breakers, but that none of them were functioning.
Harare experienced another substation fire on April 25, which left
much of the western suburbs without power.



9. (SBU) When asked about the future, Chikowore gave a pessimistic
prognosis, starting with the average tariff charged by ZESA. In
March 2009, amidst a public outcry, the government announced an
increase in the average tariff from USD 0.041 to USD 0.075 (7.5
cents) per kilowatt-hour, which Chikowore said is still a woefully
low amount to fund capital improvement. Chikowore believes the
tariff needs to be approximately 11 cents. By contrast, the average
tariff is 9 cents in the U.S. and only 3.5 cents in South Africa.


10. (SBU) COMMENT: The electricity utility ZESA is another example
of a bankrupt GOZ-owned operation. Like Zimbabwe's rail, road,
medical, and telecommunications infrastructures, Zimbabwe's
Qmedical, and telecommunications infrastructures, Zimbabwe's
electricity system will require years and hundreds of millions of
dollars to repair. In the short term, the public need for
electricity is being supplanted by more pressing needs to fund
teacher and civil-servant salaries by the cash-strapped government.
Nonetheless, if the country is to experience economic recovery, it
must restore power. END COMMENT.

MCGEE