ZESCO Limited managing director Victor Mundende says the country will continue facing challenges in the electricity sector unless a cost-reflective structure is implemented.

In an interview last week after holding a series of meetings on the importance of migrating to the new tariffs in Luapula, Muchinga and Northern provinces, Mr Mundende said there is great opportunity for growth but low tariffs are hampering the development of the sector.

“Dynamics of the economy are changing, but the price for electricity has not changed. While adjusting the tariff, we are very mindful that a lot of people can’t afford.

“So we have a lifeline tariff which is 100 units per 15 ngwee. We have applied to adjust that from 100 to 300 units so that many people can access power at the same price,” he said.

He said Zesco is borrowing money to invest in infrastructure to develop interconnectors that will ease the trading of power in the region.

“We have also embarked on interconnectors from Zambia into Tanzania into Kenya. We are also looking at the Northern part into Congo DR, so we will be doing a line from Solwezi into Kolwezi. We are talking about these projects, now how do we achieve these expensive projects? These projects require appetite from the investors to come and invest. For us to create appetite, we need a correct tariff,” he said.

Meanwhile, Minister of Energy David Mabumba says the country’s economic diversification agenda through industrialisation will be difficult to achieve if a correct tariff structure is not applied to attract investments and ensure security of reliable electricity supply.

Mr Mabumba said provision of electricity has the capacity to unlock the potential of rural areas.

“At Shiwang’andu, Zesco is generating one megawatt and this has helped increase business activities. For instance, Shiwa Safaris used to spend about US$8,000 per month before but now they are spending less than that since they now have reliable power,” he said.

Source: Daily Mail