Maravi

(NEWZIMBABWE) Electricity tariffs up 31 percent

Electricity tariffs up 31 percent
25/08/2011 00:00:00
by Business ReporterI Reuters

THE country’s electricity regulator has ordered a 31 percent tariff increase, in a move it said was meant to ensure the state-owned power utility ZESA's profitability, the authority said on Thursday.

The increase would see the average tariff going up to 9.3 cents per kilowatt hour (kWh), from the current 7.5 cents, with effect from September 1, the Zimbabwe Electricity Regulatory Commission (ZERC) said in a statement. ZESA, the country's sole power supplier, has often blamed low tariffs as one of the reasons behind erratic electricity supplies.

The country currently generates less than 1,000 megawatts against demand of more than 2,000 megawatts, a situation that has held back the recovery of the key mining and manufacturing sectors.

Efforts to compliment local power generation with imports from the Democratic Republic of Congo, Mozambique and Zambia are often undermined by the lack of funding with ZESA understood to owe regional suppliers more than US$100 million.

ZESA has been forced to ration supplies between commercial and domestic users with industry bodies blaming unreliable supplies for undermining productivity and holding back the country’s economic recovery.

"We used to cry about the policy environment. But certainly the power issue in my view is the most critical issue of our time - we need to deal with it," Joseph Kanyekanye, president of the Confederation of Zimbabwe Industries said recently.

The country’s power stations were built in the 1950s and designed for a smaller population, with little capacity added since independence in 1980.

ZESA recently announced it was in the looking for international investors to back a planned US$1.3 billion expansion of the country’s three major power plants which is expected to boost local generating capacity by at least 900 megawatts.

Labels: ENERGY, JOSEPH KANYEKANYE, NEOLIBERALISM, TARIFFS, ZESA

posted by MrK @ 3:53 PM