POWER TARIFFS TO RISE

Zimbabwe’s power utility Zesa Holdings, intends to review power tariffs by 3c/kwh to stem losses, sources familiar with the development said yesterday. The proposed increase will see average tariffs rising to 12,8c/kwh from 9,8c/kwh and will enable Zesa to generate additional revenue of about $200 million per year. In 2016, electricity sales was 7,318 GWh, 2 percent below 7474 GWh recorded in 2015 due to depressed capacity utilisation and demand side management impact of prepaid meters.

Zesa will need to seek approvals from the regulator, Zimbabwe Energy Regulatory Authority (ZERA). ZESA has often blamed low tariffs as one of the reasons behind erratic electricity supplies. Zimbabwe currently generates about 1 000 megawatts against peak demand of about 1 400 megawatts and the country complements local generation with imports mainly from South Africa’s power utility Eskom and Mozambique’s Hydro-electric Cahora Bassa.

“Zesa is still finalising the budgets but they are looking at additional three cents and this will help the power utility to break-even,” said one source who requested not to be named. No comment could be obtained from Zesa by the time of going to print yesterday.

Last year, Zesa sought a tariff increase of 49 percent, but was rejected by the Government arguing the increase would militate against efforts to lower costs of doing business. ZESA had proposed an upward review of 49 percent, a move which would have seen electricity consumers paying 14c/kwh from an average 9,8c/ kWh. ZERA said there was need for ZESA to improve efficiency levels, as well as implement cost-cutting measures. The regulator has challenged ZESA to come up with effective revenue and debt collection initiatives before making presentations for tariff increase. ZERA has already engaged a consultant to look into Zesa’s huge cost structure, amid indications that recommendations might be made to re-bundle the group to the original structure. Herald

Posted in: NEWS