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No Tariff Hike, ZESA Turns To Treasury For Help

4 years agoSun, 16 Jun 2019 04:31:12 GMT
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No Tariff Hike, ZESA Turns To Treasury For Help

Zesa Holdings is seeking Treasury support to continue optimum production of electricity at its thermal power stations amid rising expenses largely driven by a spike in coal prices.

This comes at a time when hydropower continues to shrink due to rapidly dropping water levels at Kariba Dam.

Treasury sources confirmed that Zesa had submitted a proposal for support to the Ministry of Finance and Economic Development “which is still under consideration”. Speaking to The Sunday Mail Business, sources within the Ministry of Energy said:

As it is, Zesa will definitely require support from the Treasury in the absence of a tariff hike . . . otherwise leaving the situation as it will certainly have dire consequences.

The Sunday Mail was further told that coal prices had gone up from about $27 to $88 per tonne. Despite the increase, the tariff has remained at 9,8c per kilowatt hour. ZESA, however, was seeking to raise tariffs by 30 percent, a move described as inflationary by Finance minister professor Mthuli Ncube. He said:

Any ill-advised sharp increase in ZESA tariff rates combined with power outages that we are already facing will be most unwelcome, and will certainly trigger another round of price increases and inflation.

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Meanwhile, ZESA has increased load shedding hours with some areas going without power for 16 hours a day. The load shedding dubbed “stage 2” has resulted in power being cut during peak hours, that is, morning and evening.

More: The Sunday Mail

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