An Independent, Transparent, Objective Energy Regulator Essential for The Growth of Zambia’s Electricity Market
Susiku I. Nasinda MPhil, FCCA, FZICA, CESFi, IoDZ ????
Development Finance Expert | Renewable Energy & Sustainable Finance Expert | ESG Expert | Council Member - ZICA | 2020 ACCA Zambia National Advocate of The Year Award Winner | International Speaker | Mentor
By Susiku I. Nasinda
On 7th October, I joined eminent business and civil society leaders in Zambia to support ZESCO’s Emergency Tariff Application.
The Energy Regulation Board (ERB) held a public hearing in Lusaka to receive submissions from the business community and the general public regarding ZESCO Limited ’s Emergency Tariff Application.
ZESCO is seeking to raise US$94m per month (US$15m from its customers) to support the importation of an additional 300MW from its neighbors and the Southern African Power Pool . This will bring total imports from the sub-region to 788MW. The total energy deficit stands at 1300MW.
During my submission, I strongly supported ZESCO’s application given the compelling reasons provided by the power utility. There is an urgent need to reduce the number of load-shedding hours from the current 21 hours per day to save the economy from total collapse.
The need for Zambia to implement cost-reflective tariffs cannot be over-emphasized. This will help ZESCO to optimize its cash flow and avoid accumulating further debt.
I also stated that goal congruence among key stakeholders i.e., government, ZESCO, and the business community is essential if Zambia is to successfully deal with the current energy crisis.
During the 2025 budget presentation on 27th September 2024, Minister of Finance Dr. Situmbeko Musokotwane stated that "expensive power is better than no power at all."
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I also reiterated the need for ERB to remain independent, transparent, and objective in balancing the needs of its stakeholders. The government must permit ERB to operate independently if the regulator is to make decisions that are in the best interest of the entire country.
ZESCO is currently supplying power at US$4c / kWh (below cost), compared to average import costs of US$14c / kWh. The power utility has a weak balance sheet and owes IPPs and other creditors over US$400m (down from US$1.8bn in 2021).
ZESCO’s application has received strong support from other eminent leaders such as Ms. Ana Hajduka Shields - CEO at Africa GreenCo , Mr. Ashu Sagar - President, Zambia Association of Manufacturers , Mr. Sipho Phiri - African Power Projects, Mr. Mark O’Donnell - Chairman, Business Coalition Task Force among others.
Cost-reflective tariffs are essential for the development of Zambia’s electricity market. The country has one of the lowest electricity tariffs in SADC, second from Angola. This makes private investment in the electricity sector unattractive.
We remain hopeful that the ERB will consider ZESCO’s October 2024 Emergency Tariff Application favorably, especially since the earlier application made in July 2024 was rejected.
The author is a Renewable Energy and Climate Finance Expert. He is Co-Founder and Chief Climate Finance Officer at NSN Energy Consulting Ltd.
B.Acc | Audit & Assurance | Leader | Live the dream mentorship program cluster leader | Former ZiCA CBU Chapter President | Former Copperbelt university union (COBUSU) Audit committee chairperson
1 个月Why can’t Zesco be selling electricity at a profit to avoid all these adjustments? And what will happen when the amount raised is wiped out? Won’t they come back with another upward adjustment hence an effect on the economy? Because this upward adjustment has got a ripple effect that will go into the economy with a negative impact.