Zesco Limited managing director Victor Mundende says Zambia’s population has grown beyond the power utility’s energy generation capacity.
Speaking to journalists during a media tour of the Kafue Gorge Lower plant, Friday, Mundende observed that there hadn’t been many power projects commissioned since 1977.
“Kafue Gorge lower project started in 2015, I vividly remember when I was in a project steering committee meeting when I just went into the MD’s office, I was given my letter on 15th February 2015 and within two weeks, we had a project steering committee for this project. Now in that meeting, the representatives from energy and finance didn’t want us to float the project but we were telling them that look, if we don’t do this project now, where we are going, we can see the growth of the economy and the power generation hasn’t been growing together with the economy. They said ‘no, we don’t have authority from minister to float this tender’. I said ‘okay, with or without authority, I am putting my job on the chopping board, come Monday I am floating’ and we did that. On a Monday, we floated and today we are proud that this project will come to a close this year. We all know that without electricity, there is nothing that one can do. In this country we have said it, last time we were commissioning a power plant was Kafue Gorge in 1977. In 1977, we commissioned that last unit of Kafue Gorge,” Mundende said.
“The next plant we commissioned was Shiwang’andu in December 2012. And Shiwang’andu is 1MW and it’s stand alone, it’s not connected to the grid but can you tell me, between 1977 and 2012, how much was the population of Zambia in 1977? It was just about five million people, how much is the population of Zambia in 2012, how much was it? We are talking about 14 million or so people. Meaning that with the increase in population, there was an increase in economic activity however, we had no increase in the generation capacity. But of course government didn’t sit idle, we produced as SAPP, a report in 1986 which stated that in 10 years’ time, which is 2006, we would start experiencing load shedding if we didn’t do anything. Yes, we didn’t have load shedding in 2006 but in 2007, we started experiencing minimal load shedding. Why didn’t we react to that report? We couldn’t attract investment because there was no appetite for investment because of our tariffs. An investor wants to put in money and make money, that’s how business is, you cannot put in money and do it for charity.”
And in an interview, Mundende emphasized the need for cost reflective tariffs.
“Workforce is just about 20 percent of our costs so labor is not the issue, the main issue is the tariff. You know, when you are going to sell eggs for instance, you cannot buy an egg at 10 boil it, and sell it at 5, are you going to last in business? I mean, you must be a magician. Once we get the tariff correct, I think that will go a long way in ensuring that our business grows because as you can see from here, for us to do just one power plant like our flagship project, Kafue Gorge Lower, it takes US$2.2 billion that is not a small amount of money. Once we get the tariff correct, everything else will fall in place and I always like the example I have given because in business, you have to make a profit and once you make a profit, you are able to expand your business like what we are doing,” he said.
“…I think government is making tremendous effort in order to ensure that those laws are changed so I think going forward we are seeing a situation where our tariffs will be cost of reflective and that will help you to improve. What comes first, do you tell your child that pass number one then I will give you the books or you give them the books and then let them to pass? So once we are given all those things that will give a favorable environment to our business, we will be able to run and ensure that we are efficient and do all sorts of things that are being recommended by stakeholders but as you have seen we are not sitting idle, we are not sitting ducks, we are trying by all means to ensure that we grow the energy sector.”
Mundende also lamented that climate change had negatively affected Zambia.
“There is light at the end of the tunnel, we are currently load shedding but once we commission this plant, that will be the end of load shedding but again we are not just sitting and looking at Kafue Gorge, we are going to commence very soon the Kalungwishi Hydro Power Plant. The Kalungwishi is 248MW situated in the northern part of the country. We are going to implement the solar project, already we have awarded China Power 500MW of solar and very soon they should commence. As you know, solar doesn’t take a lot of time to construct, therefore, we expect that by the third quarter of the year, we start commissioning those plants. So we are not sitting ducks, yes we have a challenge that is well known by everyone which is climate change and therefore we need to have a generation mix. We have another company called Access which is doing wind in Serenje, I think they are beginning by 100MW and thereafter double that. So we are very excited with that. There are plans in place to ensure that we end this load shedding,” said Mundende.