Zesa rebundling announced as government reverses 1990s power reforms

ZESA PYLONS

By Staff Reporter — Harare, Zimbabwe

Zimbabwe’s state power utility Zesa Holdings is being rebundled nearly three decades after its 1997 unbundling, a policy reversal the government says is intended to improve operational efficiency and coordination across generation, transmission and distribution. John Mangudya, CEO of the Mutapa Investment Fund, told a Zimpapers public lecture in Harare that the Cabinet‑backed consolidation is now being finalised.

Background and rationale for rebundling Zesa Holdings in Harare

Zesa was first unbundled in 1997 and restructured further under the Electricity Act of 2002, creating separate subsidiaries including the Zimbabwe Power Company (ZPC) for generation, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) for transmission and distribution, and Powertel for telecommunications. Policymakers at the time argued that separation would boost efficiency, transparency, and private sector participation.

Mangudya said those goals have not been realised in practice. “The unbundled structure has proved costly and inefficient, with overlapping functions, high administrative costs, and coordination challenges undermining the intended efficiencies,” he said in Harare, explaining the decision to reintegrate the entities.

Implementation timeline and expected outcomes for the rebundled utility

Cabinet began reversing the unbundling between 2018 and 2021; Mangudya said the rebundling process is now reaching its final stages. The government expects a centralised Zesa Holdings to reduce overheads, improve coordination of maintenance and investment, and strengthen service delivery amid chronic power shortages and ageing infrastructure.

Officials say further details on governance, the future roles of ZPC, ZETDC, and Powertel, and transitional arrangements will be announced in due course. The rebundling aims to align operational responsibilities under a single management and to streamline procurement, maintenance, and capital investment decisions.

Regional context and policy implications for Zimbabwe

Zimbabwe joins other countries that have revisited earlier power‑sector liberalisation after mixed results, particularly where state capacity and fiscal constraints limit private investment. Observers say success will depend on clear governance arrangements, transparent financial management, and demonstrable improvements in maintenance and reliability.

The government and MIF have framed the move as pragmatic rather than ideological: rebundling is presented as a corrective step to restore the original objective of improved efficiency and reliable electricity supply for households and industry across Zimbabwe.