ZESA fosters robust risk management

PHILLIMON MHLANGA

Power utility, ZESA, has fostered robust risk management, which is both a defensive measure and a strategic imperative for businesses to thrive in a hostile operating environment, Business Times can report.

This has contributed to ZESA’s long-term viability and asset protection.

In fact, the loss ratio has improved for ZESA, particularly for its electricity transmission unit, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), where it dropped from 99% in 2021 to 5% currently.
Over the course of the past three years, the average loss ratio for its captive policy was 28%.
Furthermore, ZESA has reported a notable 42% decrease in employee workplace accidents and a 37% decrease in transmission and distribution asset losses as a result of effective risk management.

Due to the impact of ZESA’s strong risk management practices, there has also been  a 28% improvement in matters relating to statutory, internal, and standard compliance.

Speaking at the 2023 ZESA risk management awards ceremony held Thursday at the power utility’s national training centre in the capital Harare, the CEO of Mutapa Investment Fund, Dr. John Mangudya, who was represented by Simbarashe Chinyemba, the fund’s chief investment officer, said risk management has become crucial to the power utility’s strategy.

ZESA is now under the Mutapa Investment Fund.

“Risk management has become pivotal towards the achievement of ZESA strategy. Risk management proactively identifies and controls threats and vulnerabilities that could impact the organisation negatively, thus, ensuring that the group attains its objectives and unlocks shareholder’s value,” Dr Mangudya said adding that: “This is quite important to us as we are now the shareholders of ZESA.

“Every effort is being made towards the growth and sustenance of electricity supply, thus the need to recognise and reward excellence practices.

“The ZESA Group awards were therefore established to motivate and inspire employees to continuously improve their risk management practices.

“The collaboration between ZESA Holdings and Cell Insurance on the risk aspect has brought about key successes to the ZESA group of companies. These includes a significant 42% reduction in occupational accidents involving employees at the workplace, especially at ZETDC.

“In addition to this, there has been a 37% reduction in transmission and distribution asset losses and a general 28% improvement in compliance issues including statutory, internal policies and standards.

“Generally, the risk management culture in ZESA has improved remarkably resulting in the successful completion and commissioning of major projects such as Hwange Power Station unit 7 &8 in 2023, which was commissioned by HE President Emmerson Mnangagwa.

“Another key success of risk management has been an improved understanding of risk management among all levels of employees in the ZESA Group. Therefore, it has become a trademark that fosters competition among companies within the ZESA Group. What ZESA has done to take a leading role to promote good risk management should be emulated.”

Speaking at the same event, Dr. Sydney Gata, the ZESA Holdings Executive chairman, said taking prompt action to prevent disasters on the power utility assets rather than waiting was crucial.

“ZESA is of interest, in terms of complexity and in terms of the value of its assets.

I would like to encourage this kind of motivation ceremony, where we conscientize our managers on safety and insurance and risk averting at the workplace,” Dr Gata said.

He added: “We are encouraging building or prevention as they say, “a stitch in time saves nine”.

” When you lose assets, it’s just not enough to say that you will cover it in terms of insurance cost. But, because of the service that we (as ZESA) are providing, when you lose an asset, we are actually losing part of the economy.

When you get insurance in ZESA, it’s not just the value of the assets but the value of the economy that are generated by those assets.”

Cell Insurance CEO, Isheunesu Makuzwa weighed in saying: “We have worked with the power utility ZESA to develop an enabling risk management protocol aiding in fulfilling the national mandate.

“Through that, we have collaborations on development of risk management philosophy in the group.

“We have developed five pillars of risk management which vary from loss prevention, equipment maintenance, workplace safety and health compliance and business continuity.

“I am glad to report that in pursuit of the above, we have registered major milestones that enabled the power utility to serve our nation.

“These include a good loss ratio in most ZESA Holdings policies, particularly, ZETDC, which traditionally was viewed negatively. This has resulted in it attracting favourable capacity and terms.

“A risk management culture has been developed in various stations and this has enabled the implementation of risk identification and mitigation measures in the utility’s branches.

ZETDC has maintained a very low risk ratio during the period 2021 to date.

ZETDC policy has seen an improvement in loss ratio which as at 2021 sited at 99%, which means at that time ZPC was claiming everything at premium.

But, as we stand now for the past two years, it’s sitting at as low as 5%.

“ZETDC’s captive policy also had an average 28% loss ratio over the three-year timeline.

There has been very good risk management in major projects across the country.

Running under the theme “Powering the nation to 2030 through risk management” this ceremony celebrates excellency in the field of risk management.

The ceremony recognised individuals and groups and entities within ZESA Group, who demonstrated exceptional foresight, resilience  and innovation in navigating challenges and safeguarding against potential risks and national assets.

“Infact risk management is not merely a strategy but a cornerstone of success, which requires a blend of expertise.

The winners we honour today have exemplified these qualities.

“Let us also acknowledge the impact of robust risk management practices in the group.

In today’s dynamic global landscape where risks are diverse and revolving, these efforts are instrumental in ensuring sustainability, growth and protection of our national assets.

We applaud the collective efforts to foster a culture of risk management and mitigation.”

Meanwhile, PowerTel won the Overall Risk Award Eastern region while ZENT Manufacturing Division was the overall winner in the Divisional risk management category.

Winners in the ZETDC categories included ZETDC Esigodini substation, Selous substation and Kariba substation.

Overall regional winner was ZETDC Transmission West Region.

ZPC Hwange Power Station won the business continuity management category and the Compliance Management Category Award.

ZPC Kariba Power Station won the equipment maintenance category award as well as the Loss Prevention Award. The power station also won the workplace health and safety category management.

Consequently, ZPC Kariba was the overall winner in risk management.

Dr. Mangudya proposed that ZESA broaden the scope of the categories to encompass customer experience, risk improvement innovations as well as milestones towards commercial viability and electricity self-sufficiency.

“Whilst am happy with this I would however want to see the spectrum of awards be broadened in the future to include customer experience, risk improvement innovations as well as milestones towards commercial   viability and electricity self-sufficiency. This is what Mutapa Investment Fund stands for,” Dr Mangudya suggested.

He added: “The vision of the President (Mnangagwa) is to have all State-owned enterprises attain commercial viability in order to spur growth of our economy. We cannot attain the upper middle-income status with losing making State owned enterprises.

Undoubtedly, good risk management plays a key role in that endeavour.”