Energy Minister David Mabumba says citizens and businesses must accept the upward adjustment of Zesco tariffs because that is the only way the institution can continue to reliably supply electricity.
Mabumba said cost-reflective tariffs would attract investment in the energy sector.
“The reasons which Victor (Mundende – Zesco Managing Director) has given and I don’t want to go through them are the same simple reasons why now it is necessary for Zesco to increase the tariffs. Zambia is almost at 3.9 cents per kilowatt hour. If you look in the region, the tariff is almost standing at 6 cents per kilowatt hour – almost 11 cents. I saw one country which is almost at 11 cents. There is no way somebody should even say why comparing ourselves with other countries. Are we an island?” Mabumba asked.
“We are attracting financing from the same international markets – whether you’re in Zmabia, whether you’re in Rwanda, whether you’re in Angola. All these private sector (companies) they go to the same institution; that is where they get the money.”
The Minister observed that Zambia’s electricity tariffs had been minimal for too long.
“So the tariff, colleagues, is very minimal at 3.9 cents or let us put it at 3.6 cents, it is not possible for the Zambia as a country to attract investment. The investors all over the world are looking for a country where they can go and invest their money and at the end of the day, they’re able to get a retain. How do they get the retain? They will be able to look at the tariff that Zambia is charging compared to what is being charged in Swaziland, compared to what is being charged in South Africa and if in South Africa, the tariff is at the best level, they will and put their money in South Africa,” Mabumba said.
He said Zambia needed nine million dollars to invest in new power projects and no country would invest that much in a country with low tariffs.
“Who, which country is going to give Zambia US$ 9 million if our price for the power that we’re generating is not at the right price? Zambia in the last twenty years should have moved remarkably but because we never invested as a country in generation facilities, [we have lagged behind],” said Mabumba.
Meanwhile, Mundende said Zambia required “these tariff adjustments in order that we supply you with quality life”.