South Africa’s Eskom says Mozambique’s EDM owes it R1 billion

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South Africa’s Eskom says Mozambique’s EDM owes it R1 billion

3:04 CAT | 18 Nov 2022

FILE - For illustration purposes only. [File photo: HCB]

Mozambican state-owned power utility Eletricidade de Moçambique (EDM) owes its South African counterpart Eskom nearly one billion rand (€55.9 million), including disputed amounts from 2019, the South African press reports.

“As at October 31, EDM owed Eskom R847,486,512.10 (around €47.3 million), Eskom told the South African daily newspaper Business Report.

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

According to Business Report, the Mozambican electricity company’s payments in arrears include a dispute between the two energy concessionaires regarding the origin of the electricity billed in October and November 2019. According to Eskom, EDM claims to have received the additional energy from the Cahora Bassa hydroelectric plant (HCB).

Eskom indicated to the newspaper that Eskom currently buys 1,150MW of electricity from Cahora Bassa, under an agreement which expires in 2030.

READ: US$40 billion wasted – Or how Mozambique subsidises South Africa

The South African state-owned utility company, which also faces arrears from municipalities in South Africa of about 52 billion rand (€2.9 billion), said that the EDM debt payment process is now in mediation.

“We do not have issues with our international clients [Botswana, Lesotho, Namibia, eSwatini and Zimbabwe]; 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,“ Eskom’s head of transmission operations, Segomoco Scheepers, is quoted by the newspaper as saying.

In June last year, the Minister of Mineral Resources and Energy of South Africa, Gwede Mantashe, paid a working visit to Maputo, where he met his Mozambican counterpart, Max Tonela, to discuss bilateral cooperation in the energy sector between the two countries.

READ: South Africa will need more power from Mozambique – Mantashe in Maputo | Lusa

South Africa’s state-owned electricity company has imposed large-scale power outages in the country due to generation capacity shortages resulting from breakdowns and delays in returning some generation units to service.

In April, at the peak of South Africa’s “load shedding” electricity supply cuts, 270MW from HCB was not available to South Africa due to maintenance work at Cahora Bassa, according to Eskom.

South Africa, which is considered the largest producer of electricity on the continent and provides 80% of the coal, also imports 75% of the total production of the Cahora Bassa Hydroelectric Power Plant (HCB) in Mozambique.

ALSO READ: Mozambique negotiating more HCB power for domestic market – Notícias