Zimbabwe lags behind on electricity regulatory index

THE African Development Bank (AfDB) has ranked the Zimbabwe Energy Regulatory Authority (Zera) and Zimbabwe Electricity Transmission and Distribution Company (ZETDC) as having an average level of development due to numerous insufficiencies.

Both Zera and ZETDC were among other electricity regulatory bodies surveyed in 15 countries on the continent.

In its AfDB's Electricity Regulatory Index for Africa 2018 released last week, both the Zera and ZETDC ranking gave the country an overall rank of 14th with a score of 0,4763 showing an average level of development.

"Average level of development; regulator or framework displays numerous insufficiencies not aligned with international best practice," AfDB said.

"The ERI [Electricity Regulatory Index] is a composite index that aims to measure the level of development of an African country's electricity regulatory sector based upon industry best practice. It is composed of three sub-indexes: Regulatory Governance Index, Regulatory Substance Index and Regulatory Outcome Index."

Zimbabwe was ranked 13th on the regulatory governance index with a score of 0,6120 indicating a well-developed regulatory framework and scope. Under the regulatory substance index, Zimbabwe was ranked 12th with a score of 0,3871 showing an average level of development in terms of Zera and ZETDC carrying out its mandate.

Zimbabwe was ranked 12th on the Regulatory Outcome Index with a score of 0,4542 showing an average level of development in terms of the perspective of the utility in relation to its impact.

The Regulatory Governance Index assessed the level of development of a country's regulatory framework and the scope at which the laws, procedures, standards, and policies governing the electricity sector, provide for a transparent, predictable, and credible regulator up to par with international best practices.

The Regulatory Substance Index evaluated the extent to which the electricity sector regulators are carrying out their mandate and operationalising the regulatory practices and processes which affect regulatory outcomes.

The Regulatory Outcome Index measured, from the perspective of the utility, the degree to which the electricity regulator has a positive or negative impact on the sector.

AfDB said for the African nations surveyed, there was room for improvement in terms of accountability and independence to align with international best practices to attract future investment.

"Although many sample countries had established the legal and institutional frameworks for electricity sector regulation, regulators are yet to build an adequate level of capacity and develop the appropriate mechanisms to effectively carry out their mandates and make decisions under the key aspects of regulatory substance," AfDB said.

"In spite of falling well short of international best practices, regulators in the sample countries have a moderately positive impact in the sector, especially when it comes to measures being instituted to promote energy access and enhance commercial quality of electricity to consumers; however, on average, regulators faltered most with respect to instituting cost-reflective tariffs."

AfDB recommended that Zimbabwe in the short term focus on technical standards and mini grid stand-alone systems, simplified licensing framework, technology specific power purchase agreements and the publication of reasons behind major decisions.

It also recommended that the electricity bodies address capacity building in areas of tariff setting that has already been a long complaint of the private sector and consumers as well as capacity building in the quality of service regulation.

Zera chief executive officer Gloria Magombo did not respond to questions made by the paper seeking a comment on the findings before this story went to print.