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Eskom chasing up to R1bn from Mozambique as it eyes more electricity and gas

Eskom chasing up to R1bn from Mozambique as it eyes more electricity and gas

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Eskom is chasing up close to R1 billion in overdue payments from its Mozambique counterpart, Electricidade De Moçambique (EDM), including disputed amounts from 2019, the power utility told Business Report yesterday.

This as South Africa seeks to secure more electricity and gas supplies from the country.

Eskom, with a debt burden of more than R400bn, which the National Treasury has pledged to help with, is scraping the bottom of the barrel for its outstanding payments, including R52bn it is owed by local municipalities. It has to fork out billions for diesel and infrastructure maintenance.

Eskom head of transmission Segomoco Scheepers revealed that the utility was pursuing payments from Mozambique, at Eskom’s state of the system briefing this week.

This was in contrast to its regional clients, including Botswana, Lesotho, Namibia, eSwatini and Zimbabwe, which were fully paid up.

“We do not have issues with our international clients, it is only with Mozambique that we are pursuing payment for some disputed amounts and then some agreed upon amounts that are not paid up. We are in mediation,“ Scheepers said.

Eskom’s media desk confirmed yesterday that the dispute relates to October 2019 and November 2019 invoices. The dispute relates to the origin of the power supplied in the respective months.

EDM claims to have received additional power from Hidroeléctrica de Cahora Bassa (HCB).

As at October 31, EDM owed Eskom R847 486 512.10, Eskom said.

“This amount includes the current account, undisputed arrear debt, a disputed debt amount of R350 million as well as interest on debt,” Eskom confirmed.

Eskom currently purchases 1 150MW of power from HCB , a deal that expires in 2030.

“In addition, following presidential pronouncements of July 25, 2022 to address the electricity crisis, Eskom is currently engaging various entities in Mozambique on power supply opportunities. The conclusion of discussions and power purchase agreements is subject to legislative and regulatory approvals being obtained.

“There are also currently engagements between the RSA and Mozambique governments on co-operation in terms of energy related projects,” the utility said.

Eskom confirmed it was currently engaged in a mediation process in relation to the disputed debt amount of R350 million.

Mineral Resources and Energy Minister Gwede Mantashe in June pursued talks with his Mozambican counterpart, Max Tonela for South Africa to purchase more power from Mozambique to cover the deficit caused by the closure of coal-fired power stations.

Mantashe is on record stating that every coal-fired power station that South Africa dismantles will be a market opportunity for Mozambique since it is rich in natural gas and hydropower.

“We have 16 coal-fired stations and all are under pressure to close so that they can be replaced by technologies that allow the reduction of carbon emissions. This is an opportunity that Mozambique can grab,” he has said.

However, this supply also has issues. Problems on the transmission line from the HCB inevitably are felt on the South African grid.

In April, at the peak of load shedding in South Africa, 270MW from HCB was not available to South Africa due to maintenance work at Cahora Bassa.

BUSINESS REPORT

Original Article

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