eBusiness Weekly
Tawanda Musarurwa
Industry has requested a power tariff hike in the interim while welcoming a proposed “ringfencing arrangement” for exporting firms, as strategies to address a crippling power crisis the country faces.
State power utility ZESA, has resolved to load shed at least 970 megawatts (MW) as output at key power stations has declined due to deteriorating infrastructure and the effects of drought.
Industries and households are going without electricity for at least 18 hours a day.
And two weeks ago milk processor Dairibord Holdings chief executive Anthony Mandiwanza lamented a seven-day rolling power cuts.
Some firms have said they are using up to 80 000 litres of diesel per week to cover power cuts, which is driving up their operating costs.
Speaking at the ongoing Confederation of Zimbabwe Industries (CZI) 2019 Conference here, Energy and Power Development Deputy Minister Magna Mudyiwa said:
“Cabinet has approved an arrangement where ZETDC can ring-fence large-scale power consumers that generate foreign currency so that it may assist ZETDC to import power for use locally. Industry is encouraged to work with ZESA in this endeavour.”
The Deputy Minister also added that the power utility was currently seeking a ‘bridging fund’, while a tariff increase is being considered.
In an interview with Business Weekly on the sidelines of the CZI congress here, the industrial lobby’s president Henry Ruzvidzo, said ZESA needed to prioritise industry.
“From industry’s perspective, the ring fencing arrangement is necessary to raise the required foreign currency because we realise that without importation, the problem will not be solved.
“So the ring fencing arrangement with mining, tourism and industry is necessary at this stage,” he said.
“The tariff review at this stage is necessary. Our view is that it needs to be done rather more urgently than what we are seeing, but maybe if there are concerns about the (tariff) levels, it can be done gradually and that will be necessary to solve the immediate problems.”
The CZI president, however, emphasized that if an energy tariff hike is coming, it should be wholesale.
“What we are more keen on is to try and remove distortions in the economy. Distortions make the situation complicated, so we wouldn’t want to encourage having these differential electricity tariffs (for industry and households),” he said.
