ZESA tariffs are expected to keep going up

It looks like the 30% increase to everyone electricity bill is but one of more we will see this year. According to Minister for Energy Zhemu Soda ZESA tariffs are going to keep going up.

“In order for us to achieve what we are envisioning, that is to provide adequate power and sustainable electricity, there is a need for tariffs to be reviewed regularly. It is also imperative that power be sold at cost-reflective tariffs, that way the producer is able to continue to offer and improve on the service delivery. Movements in the exchange rate and inflation will continue to threaten the power utility’s viability if tariffs are not raised”

“We cannot guarantee the nation of cheap electricity when it is not sustainable.”

via Sunday Mail

Maybe I am on an island with this one but I thought the forex auction was keeping the rate in check at least from the government’s perspective. The “official exchange rate” has been hovering between ZWL$84 and ZWL$85 for a little while. By that margin, the exchange rate shouldn’t really be a factor in this discussion.

However, I do understand the availability of foreign currency argument that the Minister alluded to in the report by the Sunday Mail with respect to buying power from South Africa and Mozambique. Zimbabwe has been a perennial power importer, and with the way things are this is an issue, especially during winter where neighbouring countries are also struggling to keep up with demand from their own people, which is not going anywhere.

What about our own power plants?

Well… as many of you have already guessed Hwange is under maintenance. The thermal plant is pumping out 440MW because it’s running at two-thirds capacity. It’s strange that one of the country’s biggest power plants is always getting tended to almost all year round. As for Kariba’s hydroelectric capacity the Minister said the following:

“Kariba Power Station is producing almost 1 050 MW and if we add all that with generation from other small plants with capacities around 30 MW, we will have about 1 500MW. As a country we need power generation above 1 500 MW in order to have stable electricity,”

Yeah… So it’s the same old story… It will be interesting to see what percentage the next ZESA tariff hike will be by.

You should also check out

Finance Minister Prof Mthuli Ncube early last week said the government has a ZWL$9.8 billion budget surplus for Q1 2021. We discussed what that means and what the government could possibly use that money for. You can play or download the podcast with the link below: