Zesa owed $1bn: Undenge

ENERGY minister Samuel Undenge says Zimbabweans, who owe national power utility Zesa Holdings a combined $1 billion, should be responsible and start paying cost-reflective electricity tariffs as a way of reducing load-shedding.

“Our tariffs have not been reviewed for the past five years and this has significantly affected power generating capacity in the country,” he said.

Zimbabwe, whose electricity tariffs are currently pegged at $0,09 per kilowatt hour against a regional average of $0,14 per kilowatt hour, has been experiencing acute power shortages since 2007.
The country is currently producing an average of 1 000 megawatts (MW) of electricity against a daily demand of 2 200MW.

Undenge said the current tariffs were not in line with the cost of production hence the need for “a reasonable and minimum” increase.

“People should be responsible and pay for electricity they would have consumed. Electricity should not be given for free, however the cost should be reasonable,” he said.

This comes as Zesa subsidiaries recently proposed a 49 percent tariff hike to 14,69 cents per kilowatt hour which they say is cost reflective and necessary to augment emergency power imports.
Zesa has since begun to import 300MW from South Africa’s Eskom to augment local generation.

Zimbabwe Power Company (ZPC) is proposing a 22 percent increase in power costs from 5,06 cents per kilowatt hour  to 6,64 cents per kilowatt hour on sale to the distribution subsidiary, ZETDC.

On the other hand, ZETDC is proposing to sell the power to consumers at 14,69 cents per kilowatt hour from 9,86 cents, an increase of 49 percent.

Although cash-strapped Zimbabweans have profusely protested against the impending tariff hike, Undenge insists that there was no going back on the increase as Zesa urgently require funding for new power generating projects.

“Now that Kariba, the cheapest source, is no longer there and we are now importing power, the economy dictates that the tariff has to increase. That gap has to be fulfilled. An increase in price is necessary to compensate for the loss of generation at Kariba and the imports,” he said.

Falling water levels in Kariba Dam have resulted in power generation declining from 700MW to 285MW in the past few months due to drought that is being experienced in the southern African region.

In an effort to compensate for the loss of power generating capacity at Kariba, Zimbabwe commissioned the establishment of a 200 MW emergency power plant to be installed at Dema Substation in the next eight weeks.

“The cost of not having power is more than having that power as generators in homes are expensive to run. The emergency diesel generators coming in the next eight to 12 weeks are expensive to run and it means we have to be prepared for that,” Undenge said.

Some of the power projects being implemented by government also include the refurbishments of Bulawayo, Harare and Munyati Thermal power stations that are expected to add 200MW to the national grid.

Zesa is also supervising the construction work at Kariba and Hwange power plants, which will see the country getting an additional 1 200MW.

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