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Sources privy to the goings-on at the parastatals told this paper that the minister had raised a lot of dust over the loans that had apparently accrued to management since 2002.
It is understood that the loans were meant for housing for directors and staff.

The Sunday Mail Business has since established that apart from the incumbent chairman and chief executive officer, the witch-hunt also claimed the scalps of two more directors and three managers at the agency on Tuesday.

Directors that have been sent on forced leave to pave way for the so-called investigations also include Engineer Batsirai Machamire and Eng Joshua Mashamba. The finance manager, human resources manager, and the commercial manager have also been sent on forced leave.
However, though the US$650 000 loans are now subject to investigations, they are a fraction of what the utility owes to the current directors, including the former chief executive officer of REA, Mr Emmanuel Midzi, who left without his full benefits.

In addition, the loans are also disclosed in the parastatal’s audited 2009 financials.
There are now fears that the present goings-on will further scupper deals that were due to come to fruition over the next month.
REA was scheduled to sign a US$100 million deal for the construction of a solar photovoltaic energy plant with a Chinese firm, Shaanx Photovoltaic Industries, on January 14 in China.

Signing of the deal could have ultimately triggered construction work on a plant that was expected to produce 10 megawatts (MW) for Mazowe and wean it from the national grid.
Last year in December, a high-level delegation from Shaanx Photovoltaic Industries visited the country and toured the site in Mazowe before signing a Memorandum of Understanding (MoU) with REA.
Furthermore, REA was also expecting, on February 4, a delegation from India, which had secured US$56 million from the Indian government to establish mini hydro power projects.

The new developments have, however, put the US$156 million worth of projects in jeopardy as the public entity is now on “auto-pilot”.
Minister Mangoma confirmed last week that he had suspended Mr Gotora and sent Mr Guvakuva on forced leave “to pave way for investigations at REA”.
“It is true that Mr Gotora has been suspended and that Mr Guvakuva was not suspended but just sent on forced leave so that we can look into US$650 000 that cannot be clearly accounted for.
“If you look at the REA’s 2009 annual financial statements, that is where we picked it up. We then asked the chairman and the chief executive to come forward and explain what happened to that money.
“From our deliberations with them, we did not get, according to our view, a satisfactory answer and that is why we then took the decision we have taken.
“Let me make it clear that we have not suspended Mr Guvakuva. We will simply make our investigations then we will act on the results of that investigation,” explained Minister Mangoma.

On the contrary, Minister Mangoma did not talk to any of the affected directors but just sent them letters to go on forced leave.
In the 2009 financial statements, REA managed to generate US$28 million, with the bulk of the money — US$27 million — generated from the rural electricity levy.
Surplus for the year was US$15 million.

A provision of US$637 000 was made for directors and staff loans.
During the review period, grid extension projects completed rose to 154 from 115, while solar mini grid projects increased to 70 from 47 the previous year.
Investigations by this paper indicated that the loans for the directors in question were approved as far back as 2006 by the former chairman, Dr Sydney Gata, in order to meet part of the parastatal’s contractual obligations that had been accruing since 2002 and also to retain critical staff.

But no loans were given at the time since the economy was in the throes of a biting hyper-inflationary environment.
It is understood that the current board led by the suspended chairman, Mr Gotora, also endorsed the loan payouts and undertook to set aside 10 percent of the revenue generated — amounting to US$28 million in 2009 — to retire the mounting contractual obligations.

The agency, however, elected to give out US$637 000 out of the US$2,8 million that was supposed to be disbursed, further exposing the minister’s move.
Some market watchers have begun to question Minister Mangoma’s tenure as the energy minister which has so far controversially claimed the scalp of Zesa group chief executive officer Eng Ben Rafemoyo.
A former senior official with REA said the recent developments smack of “something fishy” about power politics at play.
“It is a shocking exercise by the Ministry of Energy. Since when are people sent on forced leave for claiming what rightfully belongs to them? REA board has contractual obligations to meet.
“Again, what is there to investigate when the very same board openly and transparently discloses the issuance of loans to directors? It is not like there is an anomaly. How many parastatals in this country produce financial statements like REA?” said the former official.

REA is a statutory body governed by the Rural Electrification Fund (REF) Act.
The execution of its mandate involves the implementation of Electricity Grid Extension, which involves extending the electricity grid network to over 10 000 rural public institutions such as schools, rural health centres, Government extension offices and farming communities.

Also the agency is involved in Electricity End Use Infrastructure Development (EEUID), which promotes economic use of electricity in rural areas through the development of energy-intensive irrigation schemes, cottage and agro-industries.
Some of its funding is regulated as currently a 6 percent levy is charged on all electricity sales.
However, it also gets some of its financial resources from the fiscus, loans, donations and grants. At the end of 2009, REA announced that it had managed to secure a US$110 million supply credit facility from China.

But it is believed that US$855 million is required by the agency to complete existing projects and embark on additional initiatives to improve the livelihood in rural areas.-Business Herald