The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) is facing a deepening financial crisis after the Auditor-General revealed that the power utility recorded a ZWG10 billion operating loss, while its current liabilities exceeded current assets by ZWG29.9 billion, raising concerns about its ability to continue operating.
According to the Auditor-General’s Report on State-Owned Enterprises and Parastatals for the financial year ended December 31, 2025, ZETDC received an unmodified audit opinion on its financial statements. However, the report highlighted significant financial challenges that cast doubt on the utility’s future.
The Auditor-General noted that foreign loans that had not been rescheduled were classified as current liabilities after ZETDC failed to meet repayment obligations.
“These conditions indicate the existence of a material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern,” the report states.
The financial difficulties have also affected service delivery. The audit found that some customers who had fully paid for electricity connections have remained unconnected for nearly a decade, with some applications dating back to 2016 still outstanding due to shortages of connection materials.
In response, ZETDC attributed the delays to prolonged cash-flow challenges.
“Delays in connecting customers were mainly due to a shortage of connection materials as a result of cash-flow constraints the company has been facing for a long time,” the utility said.
The Auditor-General further reported that ZETDC incurred ZWG230.8 million in penalties and interest for the late payment of VAT, PAYE and income tax, which management again blamed on financial constraints.
“The ZWG230.8 million under 2024 fines and penalties relates to interest on late payments for VAT, PAYE and income tax due to serious cash-flow challenges the Company is facing,” management explained.
The audit also raised concerns over procurement practices, revealing that advance payments amounting to ZWG6.9 million were made in 2023 for switchgears that had still not been delivered by December 31, 2024. The equipment remained recorded as goods in transit, while some prepayments dating back to 2019 had not been cleared.
ZETDC said the delays arose from price differences between purchase vouchers and supplier invoices.
In addition, the auditor-general noted that several issues identified in previous audits remain unresolved, including weaknesses in asset records, outstanding statutory obligations and unreconciled balances, with the utility continuing to cite persistent cash-flow constraints as the primary cause.
