Imported power coming in 2 weeks to cut load shedding – Nkhuwa

Energy Minister Mathew Nkhuwa say government has made a US $10 million payment towards importation of 400 mega watts of power from Mozambique and South Africa, which is expected to be available to consumers within a fortnight.

And Nkhuwa says he has lifted the freeze he had earlier placed on the tariff adjustment process so that the country can shift to cost reflective tariffs.

Nkhuwa made this announcement during a press briefing held at Chief Government Spokesperson Dora Siliya’s office, Wednesday.

He said by next week, government will pay an additional US $30 million towards importation.

“Following the presidential directive to expedite the importation of power from Eskom and EDM of Mozambique, I have instructed Zesco Ltd to make sure that they expedite the process of signing these two contracts. You may wish to know that last week, I traveled to Mozambique and had a meeting with the Minister of Energy in that country. They are willing to give us 100 megawatts, then South Africa is going to give 300 megawatts. From that, we should be able to reduce the load shedding hours. The amount of money that we will be paying the South Africans and Mozambicans for the importation of power is roughly the same amount of money that we talked about in the past, which is US $40 million for 300 megawatts of power from South Africa and roughly the same amount of money for EDM. However, EDM can give us a little bit more power if they fire up the ship that is packed at the port but it is very expensive and I don’t think that we want to go that way. So we will only take 400 megawatts, that is 100 from Mozambique and another 300 from Eskom,” Nkhuwa explained.

Asked where Zesco had suddenly gotten the money for imports, Nkhuwa said government was going to “bite the bullet” before cost reflective tariffs were implemented.

“We have facilitated for the funds which we will pay this week, today we’ll pay some amount of money. It’s US $40 million dollars, so we will pay US $10 million today or tomorrow and next week, we are paying the US $30. Mozambique discussions are still at infancy so I won’t be able to give you the exact amount we are paying. But we should be able to communicate that to you within the course of next week. As you well know, the law will not allow us to adjust the tariffs just yet even if it’s emergency power. So [it] looks like as government, we may have to bite the bullet until we attend to the Act that pertains to this issue. This is one of the issues that is in the Act that is coming before Parliament within this sitting. So until such a time when we’ll be able to change the law, government will have to bite the bullet. So in simple terms, the government will pay for the importation of the power. We want to start receiving all this power in the next fortnight at the most,” Nkhuwa said.

“So initially, they wanted us to have a contract for six months, but we don’t see the necessity of getting into a six months contract. We just want to get power for two or three months at the most and it’s USD $20.5 million for South Africa per month. So for two months, USD $40 million. Once we pay that, we get the electricity and that’s done. We are hoping that we prayed very well on the 18th, God listened to us and he’s going to bring the rain. So by that time, we should be okay. About the the hours we expect to reduce load shedding, right now there is a minimum of 10 hours, we hope to reduce maybe to seven or six hours when we get the 400 megawatts, that’s what we hope to do.”

And Nkhuwa announced that he had lifted the suspension he had earlier placed on the tariff adjustment process.

“I am lifting the suspension of the tariff adjustment that I put on ice about two to three months ago, meaning that from where we left that process, it is going to continue. We want to move to cost reflective prices because even the power that we are producing in the Republic of Zambia, we are producing it at an average of 8.4 cents per kilowatt hour and selling it for under four cents per kilowatt hour. If you convert the current Dollar to the Kwacha rate, it impossible to run Zesco in the pattern that it’s being run. I don’t think that you can bring anybody to Zesco and hope that they can run Zesco in it’s current state. So things have to change. Then obviously, we are looking at changing the Electricity Act and Energy Regulation Act. This is in a process and very soon it will be in Parliament so that we can open up most of the areas which were closed. This will enable to attract investment because we’ll definitely have the best tariffs and it will help us to bring in credible investors into the industry. I think everybody is aware that we need energy like yesterday, but we shall be equal to the task,” said Nkhuwa.

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Anonymous
Anonymous

South Africa imports most of its power from Namibia and this is the same power they will import to Zambia, why can’t Zambia import the commodity direct from Namibia?
Cost effectivity demand ensuring avoidance of a chain of middle men which thing inflates eventual price.

Andrew
Andrew

Eish, people let us start becoming proactive thank reactive to issues. I sometimes wo der if we have people have the abilities to use the free thinking to suggest solutions to problems that Zambia is facing. Because some of the problems arw self inflicted, due to lack of proactive, critical and startegic thinking by most of leaders. The only preoccupation of the mind is winning the elections in 2021. Pliiiizzzzz twafwani. Please God help us

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