Govt Planning To Reduce Electricity Tariffs As Zesa Pushes For An Increase
The government, through the Ministry of Energy and Power Development, has said that it is planning to reduce the tariffs for electricity. The government wants Zimbabwe’s manufacturing and mining sector to be competitive and is considering lowering the tariffs so that they become the cheapest in the region. Currently, electricity tariffs stand at 9.86 c/kWh for domestic and 12.8 c/kWh for industry which is substantially higher than the regional average of 7.5c/kWh.
Speaking to Business Weekly, Energy and Power Development Minister Simon Khaya Moyo said:
We are engaging some key economic and energy stakeholders to review electricity prices downwards as part of efforts to make our country and economy competitive.
Our cost of production has been very high over the years, but now it’s time to review electricity downwards to match regional standards to an average of around 7.50c/kWh.
Just like we did in the fuel sector, we want to remove all impediments to make our electricity affordable to every sector.
Given the lack of investment and lines of credit in the sector our electricity was bound to be expensive but due to the appetite for investment in the electricity sector shown at Davos, we will see ourselves reducing electricity tariffs lower than our regional counterparts.
We will certainly push for the tariffs to around 7.50c/kWh to improve all sectors of the economy.
However, struggling power company Zesa Holdings is unlikely to welcome this development as it has written to the government on a number of occasions seeking permission to increase the tariffs. In June the Zimbabwe Energy Regulatory Authority (Zera) blocked Zesa from increasing its tariffs by almost 50 percent from 9,86c kWh to 14,64c kWh.
More: Business Weekly