July 29, 2019

Zim industry endorses power tariff hike

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Ndaka Majaka

ZIMBABWE’S industry has endorsed a power tariff hike amid indications players are operating with an unsustainable generator tariff of US$0,40 per kilowatt-hour (kwh) about ZW$3.20 per kwh at today (Monday’s) interbank rate.

Zimbabwe National Chamber of Commerce (ZNCC) Harare chapter
chairman, Mike Kamungeremu, said the present tariff of US$0,02/kwh
being offered by the country’s power utility, Zesa Holdings, is unsustainable and needs to be increased.

“A tariff hike is long-overdue. It all comes down to economies of scale.
We are paying more because we get up to 18 hours without power. At
generator tariff, it is US$0,40/kwh which is frankly unsustainable,”
Kamungeremu told ZTN on the side-lines of the ZNCC Energy Crisis
Breakfast Meeting in the capital.

ZTN understands a new tariff regime now awaits executive approval.

The understanding is that this tariff regime will help the power utility
service its over US$80 million debt to regional power suppliers and put
an end to load-shedding which now lasts up to 15 hours a day.

Zesa Holdings Acting Chief Executive, Patrick Chivaura, is on record as
saying the tariff adjustment will help to cushion the power utility from
rising operating costs.

Chivaura told the Business Weekly that the tariffs Zesa is currently
charging have been degraded to such an extent that consumers are now
getting electricity for free.

Additionally, Finance and Economic Development Minister Professor
Mthuli Ncube recently said electricity tariffs will be raised soon.

“In terms of how much, I can’t say, but those simulations are being done
and soon, we will have a new tariff,” Ncube said.

The development is anticipated to lead to a fresh wave of price increases
as fixed costs for business rise.


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