Low tariffs weigh down ZETDC

Prepaid meter

THE Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a Zesa Holdings subsidiary, says it is incurring heavy losses due to current low tariffs.

Speaking at a Zimbabwe Energy Regulatory Authority stakeholder consultative workshop in Harare yesterday, ZETDC acting managing director Howard Choga said the company was struggling to keep operations running.

“The cost-effective tariff that we cried for was 12,3 cents (c) (US$). Circumstances have changed, especially through the borrowing we have had to do because of the insufficiency of our cash flows,” Choga said.

“So the weighted average cost of capital has affected our tariff requirement to the extent that the tariff requirement in terms of cost reflectivity is now beyond 15 cents. What we require to operate optimally is not hearsay because government appointed an international consultant to review our operations and brought these figures.

“The cost of internal purchases which is from our Zimbabwe Power Company and independent power producers, the weighted average cost is actually 8,6c, but we sell it at 7c.

“In terms of regional efforts, we are talking to our regional partners for the purpose of importing excess capacity which they have. There is much more in Zambia and we have been talking to them about it.”

Choga said ZEDTC was also incapacitated to add new customers totalling 350 000 to the national grid.

“The poor do not have access to electricity while the rich have got access and they are paying sub-economic tariffs,” he said,

Though Zimbabwe has an installed capacity of 2 100 megawatts (MW), it generates an average of 1 200MW and meets shortfalls through imports.

This has resulted in ZETDC implementing a load-shedding regime lasting several hours.


Related Topics