Zesa seeks tariff review

Zesa seeks tariff review

Harare, (New Ziana) –Zesa Holdings has indicated it will be seeking a review of the current power tariff which the utility deems unsustainable, the Zimbabwe Energy Regulatory Authority (Zera) has said.

The current tariff is around US$0.075 per kWh, while it is estimated the tariff must be at least US$0.10 for the company and other prospective investors in the sector to be viable.

“We need to be able to support Zesa through meaningful tariff,” said Zera board chairman, David Madzikanda.

But the company has also been accused of failing to make meaningful investments in generation using the funds it has generated overtime.

The power utility is having to resort to power imports as current production is around half of the nation’s requirement of around 2 000MW.

The tariff was reviewed at least twice last year.

Zera chief executive, Edington Mazambani said Zesa Holdings would first have to consult government before applying for a review.

“They are in the process of making an application,” he said.

A power tariff increase is always met with stiff resistance from both industry and households as it impacts on the cost of doing business and cost of living.

Madzikanda said the power sector remained attractive to investors although lack of foreign currency was a major stumbling block for independent power producers (IPPs) to establish their projects.

“If the industry was not attractive we would not be having IPP but we have 93 of them,” he said.

He said the currently licensed IPPs have potential to produce up to 2 000MW, but only a few had managed to set and commence operations.

But with investors apparently using IPP licenses for speculative reasons, Madzikanda said the regulator would tighten the licensing process while at the same time continuously review progress for those who have been licensed.

Those who fail to commit to their licensing agreements, he said, would have these revoked.
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