The Reserve Bank of Zimbabwe (RBZ) has approved a regulation that will allow the country’s power utility, ZESA, to bill the exporters of goods and services in dollars, euros and other foreign currencies.
Exporters and partial exporters will have to pay their electricity bills at the international cross rate, according to the Exchange Control Order published in the Government Gazette on Monday.
An exporter is defined as a business that, on average every quarter, exports 80 per cent or more of its total output in goods and services produced or provided by it in Zimbabwe, for which it receives any foreign currency.
Partial exporters refer to those companies that fall below the 80 per cent mark, but still receive payments in foreign currencies.
Zimbabwe needs to boost its foreign currency reserves because it’s in the midst of a currency crisis that saw the annual inflation rate jump to 192 per cent in June alongside a sharp depreciation in the Zimbabwean dollar.
Statutory Instrument (S.I.) 131 of 2022 reads:
Exchange Control (Payment for Electricity and Related Services in Foreign Currency by Exporters and Partial Exporters) Order, 2022
(2) ZESA shall not make any withdrawals or payments from any foreign currency account referred to in subsection (1) without prior written approval of the Minister responsible for Finance and Economic Development and the Minister responsible for Energy and Power Development and the amount accrued in the account shall be used and applied for the —
(a) purchasing of electricity outside Zimbabwe;
(b) importation of spare parts, critical assets and components needed to maintain the local generation, transmission, distribution and retail infrastructure of electricity network to ensure sustainable supply;
(c) payment of external insurance for critical infrastructure;
(d) payment of external loan repayments. Expiry of order
It further stated that the order shall cease to have effect in relation to exporters and partial exporters who are residents of Zimbabwe six months after it is published unless earlier renewed for a period not exceeding six months.
(5) A copy of the contract or memorandum of agreement referred to in subsection (4) shall be submitted to ZERA and the Reserve Bank prior to implementation.
Manner of payment by exporters of electricity bills in foreign currency
4. Subject to section 3(2), an exporter or partial exporter billed in terms of section 3 shall pay for the supply of electricity supplied by ZESA—
(a) from its export proceeds deposited in a foreign currency account operated by it, as may be permitted by the Reserve Bank of Zimbabwe after retentions have been applied; or
(b) from the share of its export proceeds permitted by the Reserve Bank to be credited to its foreign currency account held by it with the authorised dealer, which processes Form CD 1 in respect of its exports, in the case of a partial exporter or business organisation referred to in the definition of “exporter”.
Prepayment of electricity bills by exporters and partial exporters
5. (1) Subject to subsection (2), any designated consumer of electricity may enter into a contract or memorandum of agreement with ZESA to pay in advance for the supply of electricity by ZESA in foreign currency.
(2) A copy of the contract or memorandum of agreement referred to in subsection (1) shall be submitted to the ZERA and Reserve Bank prior to implementation.
Accounting of foreign currency obtained by ZESA under this order
6. (1) All foreign currency received by ZESA in terms of this order shall be deposited in a foreign currency account opened and operated with any authorised dealer: Provided that ZESA may open and operate separate foreign currency accounts with the same or different authorised dealers in respect of each of the foreign currencies in which it received payment in terms of this order.