Maravi

IMF comment on Zesco saddens Sisala

IMF comment on Zesco saddens Sisala
By Chiwoyu Sinyangwe
Monday May 12, 2008 [04:00]

ZESCO managing director Rhodnie Sisala has described as unfortunate the statement by IMF that the power utility is a financially unviable company that is incapable of mobilising resources for necessary expansion of power generation. Speaking during the Institute of Directors (IoD) luncheon, on Friday Sisala said the comments were not made in a sincere manner because the International Monetary Fund (IMF) had always worked closely with government in mapping out the growth strategy for Zesco Limited. He said he was reluctant to comment further on the matter.V

“The comments by the IMF are most unfortunate. I am even reluctant to comment on that statement because they have not been made in a sincere manner,” Sisala said. “We did not expect them to bring in that issue because there has not been a stage when they have not been part of the discussion that is on the electricity situation in the country. What is it that government has done about the electricity sector without consulting IMF and World Bank…even working with other institutions like the Development Bank of Southern Africa, the European Investment Bank (EIB), and that is how we have proceeded in dealing with the electricity situation. So I found those comments not to have been made in a sincere manner.”

Sisala said Zesco was currently engaged in discussion with financiers locally and internationally to source for the money needed for rehabilitating and increasing power generation facilities.

He also said the country needed about US$4 billion to overcome all the challenges it was currently facing in the energy sector.

And on calls by IMF that government unbundled Zesco into three segments namely generation, transmission and distribution, Sisala said preliminary results indicated that in countries where that had been implemented, the power sector was in a mess.
He also said the current power provision responsibility for the Zesco was not insurmountable and that the power utility was capable of handling power from generation, supply and distribution.

“Power responsibilities for Zesco are not too big. We only have 350 000 customers and we handle less than 1, 600 mega watts while some of the utilities in the region like Eskom of South Africa handle about 20 to 30 million customers and have installed capacity of 45, 000 mega watts but still intact,” Sisala said. “Examples are there to show that in some countries in Africa like Uganda and Kenya where electricity has been divided into the three, the energy sector there is in a total mess. In fact in Uganda after the power utility was unbundled, electricity charges jumped from 9 cents to 27 cents per kilowatt-hour.

In a paper called Electric Power in Zambia - potential obstacle to growth, the IMF observed that Zesco would have a hard time raising the needed finances for investment even if it raised electricity tariffs due to its track record and weak balance sheet.
The IMF further proposed for the unbundling of Zesco into three segments namely generation, transmission and distribution, saying the move would improve efficiency of the country's monopoly power company.

Labels: IMF, RHODNIE SISALA, ZESCO

posted by MrK @ 3:56 AM