Over the past few months, Zimbabwe has been in a crippling power crisis and one of the major reasons for this was that our electricity producers were selling power for peanuts. Well, not literally but they may as well have been.
A few months ago the tariffs were revised but even then they remained low and ever since there’s been word of a tariff increase on the horizon. That hasn’t materialised but it seems closer than ever as the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) recently applied for a tariff review.
If the tariffs set a few months ago were inadequate at the time of the shift, they have become more useless owing to the fact that our local currency has significantly lost its value since the last tariff review and ZETDC acknowledges as much:
The current tariff of ZWLc38,61/ kWh has been severely eroded due to the movement of macroeconomic fundamentals. Therefore viability and service delivery has been compromised.ZETDC
Strangely enough, the tariff being reported (38.61c/KWh) is actually higher than the one announced when the changes were made (27c/KWh). This tariff was supposed to represent a tariff of US3c/KWh which was a far cry from the US14c/KWh paid by South Africans. Regionally the closest comparison is Zambia who pay US7c/KWh.
That would mean for us to pay a more competitive price for energy the tariff hike would need to be anywhere between ZWL$1.30/KWh being paid in Zambia to ZWL$2.59/KWh being paid in South Africa. That’s a steep hike and I believe ZETDC will place one KWh slightly at around ZWL$0.93 which is equivalent to US5c.