US embassy cable - 03HARARE675

UNCLAS HARARE 000675 
 
SIPDIS 
 
STATE FOR AF/S 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
PASS USTR ROSA WHITAKER 
TREASURY FOR ED BARBER AND C WILKINSON 
STATE PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: ECON, EINV, ETRD, ZI 
SUBJECT: Increasing South African Leverage over Zimbabwe 
in Electrical Power 
 
Ref: a) Harare 79  b) Harare 643  c) Harare 489 
 
1. (SBU) Summary: Zimbabwe's growing dependence on South 
African energy - and diminishing ability to pay for it - 
renders the southern neighbor infinite leverage here. 
End Summary. 
 
2. (U) Domestic power generation is in shambles, mostly 
due to coal-miner Wankie Colliery's dilapidated state 
(refs a/b).  Depending on the source, Zimbabwe now 
imports 40 percent of its electrical energy.  Reportedly, 
60 percent of these imports come from power giant ESKOM, 
and the remainder from Mozambique's Cahora Bassa, the 
DRC's SNEL and Zambia's ZESCO.  If these numbers are 
correct, ESKOM now supplies 24 percent of Zimbabwe's 
power. 
 
3. (U) Regional energy companies, and especially Cahora 
Bassa, have cut exports to an increasingly delinquent 
Zimbabwe.  As a result, most Zimbabwean industries have 
begun to suffer power rationing.  While not yet as 
critical as the ongoing fuel and food crises, company 
reps tell us the energy crisis is becoming worse each 
day.  GOZ attempts to persuade exporters to pay in U.S. 
dollars have made no impact (ref c). 
 
Comment 
------- 
4. (SBU) We understand parastatal ESKOM has been more 
timid than other power companies in coaxing the insolvent 
GOZ to address arrears and has thus far maintained its 
power supply at near normal levels.  It is not clear to 
us what signals the RSA has been sending to ESKOM, but 
its adoption of a position paralleling that of Cahora 
Bassa would have a major effect here.  Purely on economic 
grounds, however, we suspect ESKOM's magnanimity has its 
limits, although we defer to Pretoria for more nuanced 
insight.  Unless the GOZ reassesses policies that are 
obliterating Wankie and many other companies, a more 
severe energy shortfall is likely. 
 
Sullivan