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TARIFFS HIKE ‘PAINFUL’ BUT NECESSARY, SAYS EAZ

By Mukosela Kasalwe

THE proposed electricity tariffs is necessary to attract the private sector and the sustainability of the power utility firm ZESCO, says Economics Association of Zambia (EAZ) president Lubinda Habaazoka.

Dr. Habaazoka described the proposed electricity hike as a dilemma saying consumers would be directly affected but observed that ZESCO had been running at a loss in the manner it generated and eventually sold electricity to consumers.

In an interview yesterday, he said power generation investors were more interested to invest in countries that had cost reflective tariffs.

The EAZ president said ZESCO subsidizing electricity to consumers would eventually render the power utility firm unsustainable.

Dr. Habaazoka however, expressed optimism that the energy mix that Zambia had embarked on such as the 54 megawatts solar power plant in Lusaka among others, would help ease the situation.

“This is a dilemma kind of situation because it will affect consumers but the continued subsidizing of electricity to consumers by ZESCO may eventually render it unsustainable,” he said.

He urged the Energy Regulation Board (ERB) in reviewing the tariffs to be cognizant of the steel industry such as the one in Kafue.

Dr. Habaazoka said the tariff hike should not result into  loss of jobs but help boost production through stable power supply.

Recently, Energy Forum Zambia chairperson Johnstone Chikwanda said there was need to review the existing tariffs to prevent Zesco from importing power at a high cost only to sell it at  subsidized tariffs.

Mr Chikwanda said the average cost of purchase from Independent Power Producers (IPPs) was around 11 cents while Zesco was selling on average around 8 cents after the last upward adjustment.

 

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