ZESA WARNS OF MASSIVE POWER CUTS LOOMING
THE country’s power utility, Zesa, has warned that it could resume power cuts again three years after stopping them due to supply constraints, as government remains reluctant to approve a tariff hike ahead of crucial general elections by July.
Zesa chief executive officer Josh Chifamba said the parastatal has been struggling to meet its obligations due to foreign currency shortages and lower tariffs.
This comes barely a month after Energy minister Simon Khaya-Moyo shot down Zesa’s proposed tariff hike. Zesa wants to increase tariffs to an estimated US15 cents per kilowatt hour (kWh) from US9,86 cents per (kWh.)
“First of all you need to know that the last time we had a tariff increase was in 2011 and from 2011 to now the ground has shifted a lot. In 2011, we had Kariba contributing fully, but come 2015, Kariba stopped producing at the level we were producing in 2011 because of the water situation (drought). We then had to employ other more expensive sources of electricity which we have done,” Chifamba said in an interview.
“In 2011, we had not started building Kariba and an additional cost item arose even during the time we were building Kariba. There was interest during construction and we did not have cost cover for that. It was about US$56 million. Now with the bond notes and the issue to do with forex, there is a premium on foreign currency and our suppliers who supply consumables they are factoring that into the items we buy from them. There is so much that has been happening, if you look at our salary bill, we have actually kept it flat.
“So the costs that we want covered are legitimate costs, they are external costs, they are externalities to us and they should simply be in accordance with the tariff that we have but we have not been able to pass through to customers and at the same time we don’t have the capacity to absorb those costs.”
Commenting on regional tariff levels in relation to Zimbabwe, Chifamba said countries like Zambia were relying solely on hydroelectricity, whose cost is lower than thermal.