Zimbabwe: ZESA U.S.$ Electricity Bills Rattles Already Strained Industry

5 April 2023
New Zimbabwe (London)
By Alois Vinga

INDUSTRY is rattled by the Zimbabwe Electricity Supply Authority's (ZESA) decision to peg power usage in US$ amid calls for the authority to explore other avenues to raise foreign currency.

Companies are experiencing excruciating electricity outages, sometimes running for periods in excess of 20 hours a day, reversing economic gains made so far.

Faced with a tough situation the power utility recently moved to peg electricity tariffs in US$ for specific companies with heavy usage.

But in a recent Confederation of Zimbabwe Industries (CZI) Business Environment Insights report, the sector admitted that indeed ZESA imports electricity and pays in US$ but stressed the need to take away that responsibility from companies.

"However, while this need is clear, the liability for raising this foreign currency should not be passed on to business.

"Rather, ZESA should be able to purchase foreign currency from the auction or WBWS like every other importer, rather than getting the prerogative of charging in only one currency in a dual currency environment, where businesses earn a portion in ZWL$," said the industry lobby group.

CZI said industry is already experiencing induced costs due to power cuts resulting in damage of machines and increased production costs due to usage of alternative energy.

"The introduction of electricity US$ payments will continue to worsen the ease of doing business and it is also promoting dollarisation, which has more disadvantages to the industry than its advantages," said the industrialists.

CZI said while the situation has been dire in recent months, the prospects for 2023 look bright from April to November 2023 when Kariba water levels are set to improve.

"It is expected that improved rainfall patterns in the north along the Zambezi River will increase inflows into Lake Kariba.

"The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) expects Kariba Power Station to feed 775MW by mid-April to May 2023 from the current 350MW1," industry said.

Over and above these prospects ,Hwange 7 completion has been delayed but ZETDC now expects it to feed the grid in March 2023, with Hwange 8 expected to be complete by June 2023.

The two power stations are expected to add 600MW to the grid, which would see power declining by May 2023.

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