VZCZCXRO5469
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0967/01 3481533
ZNR UUUUU ZZH
R 141533Z DEC 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 5216
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHDS/AMEMBASSY ADDIS ABABA 3319
RUEHKI/AMEMBASSY KINSHASA 0539
RUEHGP/AMEMBASSY SINGAPORE 0009
RUEHBJ/AMEMBASSY BEIJING 0107
RUEHKM/AMEMBASSY KAMPALA 0007
RUEHNR/AMEMBASSY NAIROBI 0009
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000967 
 
SENSITIVE 
SIPDIS 
 
AF/S FOR B. WALCH 
EEB/ESC 
DRL FOR N. WILETT 
CA/OCS/ACS/AF M. RAUGUST 
JOHANNESBURG FOR RCO K. MAY 
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, LITERALLY IN THE DARK 
 
REF:  A. HARARE 000361 
      ¶B. HARARE 000941 
 
¶1. (U) SUMMARY:  Zimbabwe produces about half the electricity it 
needs, resulting in persistent blackouts that constrain industrial 
output and economic recovery.  Zimbabwe's Electricity Supply 
Authority (ZESA) struggles to operate and maintain a decrepit 
national grid, which due to a chronic lack of coal, aging equipment, 
vandalism, and general neglect routinely supplies only 750 MW, 
against a national demand of around 2000 MW.  Habitual load-shedding 
has become the norm, with many rural regions without power at all. 
Given the absence of scheduled capacity building projects and a 
government-controlled tariff schedule that prevents revenue for 
capital improvements, no improvement is in sight.  END SUMMARY. 
 
--------------------- 
Insufficient Capacity 
--------------------- 
 
¶2. (SBU) David Chikowore, an electrical engineer with ZESA (a 
government-owned parastatal and sole electricity supplier in 
Zimbabwe) spoke openly about the country's electricity woes during a 
meeting with Conoff on December 2.  Chikowore explained Zimbabwe's 
root problem is insufficient generation capacity.  At the core of 
the Zimbabwe national grid is the 750 MW hydro-electric plant at 
Kariba.  However, due to periodic maintenance and fluctuating water 
levels in the Kariba Reservoir, this plant often operates at less 
than full capacity.  For example, in November 2009 the plant 
underwent annual maintenance that restricted output to only 400 MW, 
while the reservoir's water level in the dry season often restricts 
the amount of water that can flow through the turbines.  Chikowore 
estimated that the plant, on average, supplies about 550 MW. 
 
¶3. (SBU) In addition to the hydro plant in Kariba, Zimbabwe has six 
major and three supplemental coal-burning plants, which all suffer 
from varying degrees of inefficiency and insufficient coal supply. 
Hwange, Zimbabwe's principal electricity generating facility is 
comprised of six major coal-burning furnaces with a total design 
capacity of 1220 MW.  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.  However, due to coal shortage and 
disrepair, the three supplemental plants have been completely 
dormant since 2007, while three of the six plants in Hwange are 
normally down for service or refurbishment at any given time. 
Chikowore explained that in 2009, Hwange has produced an average of 
about 460 MW. 
 
¶4. (U) Although Hwange is the site of one of the largest coal 
deposits in the Southern African region, the Hwange Colliery Company 
has been unable to meet demand, plagued by a series of conveyor 
belt, dragline, and equipment failures (Ref A).  Like other Zimbabwe 
state-run enterprises, it 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 
QMineWeb, 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 of coal, 
with Hwange supplying less than 180,000.  Aggravating the problem is 
the Zimbabwe National Railway's state of disrepair.  Chikowore 
explained that coal for the supplemental plants must be trucked from 
the colliery, as the railway lines are unserviceable, and that 
trucking coal to the supplemental plants is neither feasible nor 
cost effective.  He said it was cheaper to buy power from 
neighboring countries (Mozambique, Zambia, and DRC) than it was to 
transport coal to the outdated and inefficient supplemental power 
plants. 
 
--------------------------------------------- ----- 
Zimbabwe Is 1000 MW Short, But Exports Electricity 
--------------------------------------------- ----- 
 
HARARE 00000967  002 OF 003 
 
 
 
¶5. (SBU) A principal factor in the depressed Hwange output is an 
ongoing refurbishment of four plants.  In a 2007 barter deal between 
ZESA and Nampower (Namibia's power utility), four of the six 
turbines are being replaced and the corresponding generators 
refurbished.  In exchange for the refurbished plants, ZESA agreed to 
repay Nampower by supplying electricity.  Similar to a variable 
mortgage, initial payments in 2008 were for only 50 MW.  However, in 
2009 the payments jumped to 150 MW and will remain in effect for the 
next five years.  Of note, the Hwange refurbishment only includes 
the four smaller generators, with the 220 MW generators without any 
prospect of repair. 
 
--------------------------------------------- - 
Decrepit National Grid and Daily Load-Shedding 
--------------------------------------------- - 
 
¶6. (SBU) Beside not generating enough power, ZESA is also unable to 
equitably distribute the power it does generate.  The whole grid 
distribution system suffers from years of vandalism and inadequate 
maintenance, resulting in large areas disconnected from the national 
grid.  Vandalism has included the theft of the transmission fluid 
from the step-down transformers and theft of the timbers used to 
string transmission lines.  Chikowore estimated that over 900 
transformers were in need of service or replacement in Harare and 
Gweru alone. 
 
 
¶7. (U) Aware of the gap between supply and demand, ZESA attempts to 
distribute the pain through publication of a "load-shedding 
schedule."  In theory, the schedule is designed to equitably supply 
industry and neighborhoods with power, while providing advance 
warning of blackout periods.  However, in practice, the schedule, 
built upon faulty assumptions, has become merely a starting point 
for further cuts.  November 15, a typical day, serves to illustrate 
the dynamic. 
 
¶8. (SBU) On November 15, due to annual maintenance, Kariba produced 
only 450 MW, not the planned 500 MW.  Hwange had one more furnace 
out of service than planned, resulting in only 430 MW production, 
vice the planned 550 MW.  Together, the two plants supplied 880 MW 
to the national grid, although 1050 MW were planned.  From this 880 
MW, 150 MW were diverted to Nampower, leaving 730 MW for domestic 
consumption.  The load-shedding schedule assumed a demand of 1170 
MW, resulting in a 270 MW shortfall that was used to build the 
load-shedding schedule (1050 supply, minus 150 Nampower, minus 1170 
demand).  Assuming an accurate prediction of demand, the ZESA 
engineers at the control panels faced an additional 170 MW shortfall 
(because actual production was below the expected level) before 
anyone turned on a light.  However, the 1170 MW demand was 
inaccurate as well.  Throughout the day, as "pulls" on the system 
increased, nervous engineers watching their frequency panels shed an 
additional 320 MW in addition to the published schedule of 270 MW. 
Chikowore explained that this additional real-time load-shedding had 
become a daily dynamic. 
Qbecome a daily dynamic. 
 
-------------- 
Grim Prognosis 
-------------- 
 
¶9. (SBU) When asked about the future, Chikowore gave a pessimistic 
prognosis.  Lamenting the total lack of any capacity building 
projects on the books, he said no real change to the daily 
load-shedding dynamic could occur within the next five years.  He 
said that in the past, ZESA had purchased power from its regional 
neighbors (Mozambique, DRC, and Zambia), but excess power was in 
short supply and ZESA could not afford to buy it when it was 
available. 
 
¶10.  (SBU) According to Chikowore, ZESA's average tariff schedule 
barely covers cost, leaving no revenue for capital improvements or 
 
HARARE 00000967  003 OF 003 
 
 
refurbishment.  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.  Chikowore said 
this increase was still woefully inadequate and did not provide for 
capital improvements.  He said ZESA had applied to the Ministry of 
Energy Regulatory Committee to increase the tariff to 9 cents 
beginning in January 2010, though he believes the tariff should be 
approximately 11 cents to provide realistic funding for 
refurbishment. 
 
¶11. (U) A November 2009 World Bank report estimated the cost of 
transmission emergency rehabilitation at USD 561 million.  In a 
November interview preceding publication of the new national budget, 
the Minister of Energy and Power Development, Elias Mudzuri, said he 
hoped that his ministry would receive between USD 70-100 million for 
rehabilitation.  As reported in Ref B, Finance Minister Tendai Biti 
placed the power sector at the top of his public-sector priorities 
when he presented the 2010 budget, allocating USD 53 million towards 
refurbishment. 
 
¶12. (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 
electricity power sector will require years and hundreds of millions 
of dollars to repair.  Although Minister Biti acknowledged the 
importance of refurbishing the power sector, we anticipate a revenue 
shortfall will compel him to abandon a large portion of this 
priority in favor of an irreversible commitment for increased wages 
in the public service.  END COMMENT. 
 
RAY