HomeBusiness DigestZesa report on pricing undertaken by Sadc-elec

Zesa report on pricing undertaken by Sadc-elec

Godfrey Marawanyika

THE Zimbabwe Electricity Supply Authority (Zesa) report on energy pricing undertaken by Sad-elec of South Africa will be handed over to government and the power utility next month.

So far Sad-elec, a Johannesburg-based energy consulting firm, has submitted its draft report to Zesa.

The objective of the energy pricing study is to develop a regulatory framework necessary for economic regulation of the country’s electricity industry.

Zesa general manager (corporate affairs) Obert Nyatanga said the group would submit its report next month.

“Sad-elec, who were selected through a tendering system on the electricity pricing study, have so far finished the draft report,” he said. “The company was chosen through a tendering system, and these guys have done several studies across the world. By mid-June they should have handed in their report which will determine if we were right or wrong in our tariff hikes.”In January Zesa introduced a 400% tariff hike but was forced to reduce the increases after having stiff resistance from consumers.

The complaints by consumers eventually forced Zesa to reduce their tariff by between 29% and 45%.

In a statement on the attaining of the contract from Zesa, Sad-elec said the new tariffs were needed to enable the cash-strapped parastatal to secure new investors.

Sad-elec said the pricing study was being done to develop a framework for economic regulation of the electricity industry, which would cover power generation, transmission and distribution.

“Based on this framework we will define principles for the necessary codes, draft tariff orders for the economic regulation of the industry and undertakes an energy pricing study,” the company said.

“With the current inflationary situation in Zimbabwe, the implementation of new electricity tariff orders is required as a matter of urgency to secure the financial viability of Zesa and to attract private sector investment in the generation sector.”

The firm said in addition, the project further aims to develop principles for the licensing framework for licensees as well as codes for governing wholesale energy trading and network access agreements.

“These steps are necessary to support the overall restructuring initiatives undertaken by the government,” the company said

Nyatanga said although an agreement would be reached within the next month on the disposal of Hwange and Kariba, the investors were concerned about the security of their investments.

“The investors need to know what mitigatory measures are in place, they want guarantees either in form of tobacco or minerals as security and they want to be assured that they will not be prejudiced,” he said

“Some of the investors are demanding first class guarantees or Prime Bank guarantees which are only found in New York but because of the political problems we cannot go to NewYork.”

Some of the Sad-elec clients include government departments in South Africa, Swaziland, Lesotho, Mozambique, the Southern African Development Community secretariat, and Rio Tinto Zimbabwe Ltd.

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