ZESCO Limited has entered into a long-term agreement with Konkola Copper Mines (KCM) following successful conclusion of negotiations after the declaration of the supply and transmission lines on the Copperbelt as common carrier.

The agreement between ZESCO and KCM is part of ZESCO’s long-term strategy of correcting imbalances in the power supply chain, Zesco Director Strategy and Corporate Services Patrick Mwila has stated.

The artificial imbalances in supply were the result of the Bulk Supply Agreement signed between ZESCO and Copperbelt Energy Plc on November 21, 1997 that had been commercially disadvantageous to ZESCO and which expired on 31 March 2020.

“These imbalances were aided by certain clauses which ensured only CEC could supply the lucrative Copperbelt mining market ever since the BSA was signed in 1997.
It is also in line with the Government’s new policy framework, which supports an open Electricity Supply Industry (“ESI”) that is intended to encourage participation of various players in the three key segments of the value chain, i.e. Generation, Transmission and Distribution. The future is brighter for the electricity trade if new entrants are free to setup a power plant, negotiate for direct supply with any willing consumer and request and negotiate for the wheeling (or transportation) of their power with owners of infrastructure on commercial terms across all transmission and distribution lines as long as capacity is available, and regardless of the ownership,” Mr Mwila stated.

“By eliminating monopolistic tendencies, the Zambian electricity sub-sector will soon realize efficiencies, as neither ZESCO nor any other owner of Transmission or Distribution Infrastructure can claim exclusivity for their use as third parties will be able to supply power across Zambia. ZESCO welcomes this competitive environment and the opportunity to prove that it can compete on a level playing field with the best competitors in the market.
Specifically, ZESCO is now in a position to compete for the supply of power directly to those mining consumers in the Copperbelt who are able and willing to enter into new commercial relationships. Supply to such consumers was previously the preserve of CEC, but with the lapse of the BSA, the consumers, ZESCO and CEC are free to buy and sell power from anywhere and supply to anyone as long as the terms are commercially competitive.”

Source: https://zambiareports.com/2020/06/08/zesco-kcm-sign-binding-power-supply-deal/