KABANDA CHULU, Lusaka
GOVERNMENT is reviewing the Energy Regulation Act relating to the electricity sub-sector to introduce a multi-tiered tariff increment framework to replace the current one that requires power supplying companies to make submissions requesting for increments.
During a panel discussion hosted by Standard Chartered Bank under the theme Zambia in the world economy: The macroeconomic outlook, Energy Regulation Board (ERB) senior manager- research and pricing Simweemba Buumba said there is need to diversify the energy generation mix if the country is to avoid the recent crisis.
Mr Buumba said having the correct tariffs in place is important in attracting investments in the power sector.
“Power imports are costly; some charges average 18 US cents per kilowatt hour. Government has since drafted a Bill to introduce a multi-tiered tariff system that will allow decisions to be made now to cover a three-year period that will take various factors into consideration. This way we will avoid lengthy processes of public hearings and other issues,” Mr Buumba said.
Mr Buumba said the Bill will establish a power purchase agreement (PPA) framework to enable investors to start projects immediately after regulatory approvals.
“The current situation is that investors delay to start projects because they will have to negotiate PPAs,” he said.
And bank chief economist for Africa Razia Khan said the power situation has improved with the Kariba Dam water levels rising towards optimum levels.
“But power challenges could intensify in future since demand is expected to reach about 4,000 megawatts by 2024 against current installed capacity of about 2,500 MW [but various projects have been lined up].
“Also the pricing of power should be settled amicably between opposing views. Big consumers argue that they usually pay for inefficiencies,” she said.
Earlier, Standard Chartered Bank Zambia managing director Herman Kasekende said positive steps have been taken to address the energy deficit.
“But how do we ensure sustainable energy provision for the future?” he asked.