Economic tariffs are important for attracting investment into the power sector, the Energy Regulation Board (ERB) and ZESCO have echoed.
Speaking at a public discussion forum on load shedding, ERB Director General Elijah Sichone and ZESCO Managing Director Victor Mapani said in their remarks that tariffs were a signal to the market.
“A tariff path to cost-reflectivity is important because it sends a signal to investors that investing in energy in Zambia is efficient,” said Sichone. He said the ERB was following a tariff framework approved up to 2027.
Meanwhile, Mapani asserted that systematic tariff migration gives certainty for investment. He disclosed that several developers who have shown interest in investing in the country have gone away because lenders cannot give them the money because offtake tariffs are lower than the production cost.
He said that was why even though ZESCO has signed many power purchase agreements (PPA), there was nothing much to show on the ground because developers were failing to reach financial close due to the generally low tariffs.
Earlier, Sichone revealed that the ERB had approved almost 13 PPAs with a few more about to reach financial close.
He said the regulator had adopted dynamic regulation to be responsive to the current emergency. “Processing of power supply agreements is now done in 48 hours from 20 days before and we have relaxed the solar equipment importation requirements.”
He stated that becoming energy-conscious, energy-efficient, and energy-substitution were the best short-term measures against load shedding.
Mapani said the short-term measures taken by ZESCO to respond to the power crisis included power rationing, immediate power imports– currently around 400MW but expected to increase at the beginning of October–and recalling over 50% of exports.
He said ZESCO also quickly psyched the public to look for alternatives and to switch to save, as well as shifting from electricity for cooking and heating to gas and solar.
However, the vast majority of consumers affected by the inordinately long hours of power cuts feel that they have not been given any viable short-term measures.
Ashu Sagar, president of the Zambia Association of Manufacturers, who also spoke at the event pointed out that ZESCO needed to concentrate on the short-term measures because that’s where the problem is most pressing.
“Medium to long-term, there’s lots going on in the background,” he observed.
