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Zambia to double electricity prices

by Reuters
17 Sep 2019 at 19:33hrs | Views
Zambia is in talks with South African power utility Eskom to import 300 megawatts (MW) of electricity, Energy Minister Mathew Nkhuwa said on Tuesday, adding that retail prices could double once imports begin.

Zambia has a power deficit of more than 750 MW because of low water levels at hydropower dams, Nkhuwa told reporters on the sidelines of an energy meeting. He gave no time-frame for when imports could start.

"(Retail prices) will be maybe double the amount because we are paying half the amount that we are supposed to pay for electricity," Nkhuwa said.

Zambia, which has been rationing power after a severe drought hit its hydropower sector, has historically priced electricity below the cost of production via subsidies. Only in recent years has the country started gradually to raise prices.

In 2017, Zambia's energy regulator approved a 75 percent price hike for electricity retail consumers and introduced a flat 9.30 U.S. cents/kilowatt hour (kWh) tariff for mining companies.

Nkhuwa said the government also planned to send a delegation to Mozambique to negotiate a new power-purchase agreement.

Zambia cut its economic growth forecast to around 2 percent for 2019, from an estimated 4 percent, due to the impact of the drought on its power supply and agricultural production.

Zambia, like Zimbabwe to the south, generates most of its power from Kariba Dam on the Zambezi River which is on the border between the two countries.

The Kariba Dam has towered over one of Africa's mightiest rivers for 60 years, forming the world's largest reservoir and providing reliable electricity to the two countries.

But as drought grips the region, flow on the Zambezi river has dwindled to a third of what it was a year ago, limiting generation.

Source - Reuters