By SYLVESTER MWALE –

THE current power deficit the country is facing requires more investment in power generation and alternative energy sources, but the present low tariffs are counter-investment.
In view of this, Zesco has proposed new tariff hikes aimed at increasing the capital base needed for reinvestment in power generation.
In an interview in Lusaka yesterday, Zesco spokesperson Henry Kapata revealed that the new tariff hike proposed by Zesco would attract about US$3.7 million investment in the country’s power generation.
Zesco, which has not increased its residential tariffs in the past five years, has proposed to hike the charges for residential, social services, commercial and maximum demand customers in a bid to attract investment.
Until 2013, there had never been construction of any power plant in Zambia from 1976 due to low and uneconomic tariffs which could not attract investment in power generation.
The proposal seeks to increase the tariffs from K18 for fixed metered residential customers to K54 per month while the current 31 ngwee per kilowatt per hour for commercial tariffs would rise to 88 ngwee.
Consumers that use up to 500 units per month would pay only 15 ngwee per kilowatt.
However, the proposal received strong opposition from Zambia National Farmers Union (ZNFU) and the Consolidated Farming Limited (CFL) during a public hearing on Tuesday.
The two farmers’ organisations felt that the upward adjustment would result in the reduction of hectarage being cultivated, which would ultimately lead to job losses among farm workers.
They, however, proposed that the increase should not be implemented at once, but be staggered to enable the farmers time to adjust.
Nevertheless, Mr Kapata said in Lusaka that the new tariffs would help to boost investment in power generation and provide additional 1,500 megawatt capacity.
“The tariff increase will also ensure sustainability for both Zesco and the private developers and contribute to mitigating future power deficits.
“The current tariff levels cannot support the level of investment necessary for quality, reliable electricity supply. The current tariffs are too low to attract significant investment in power infrastructure from the private sector,” Mr Kapata said.
As well as the need to attract investment in power generation, Zesco’s proposal to make an upward adjustment of tariffs is driven by the fluctuations in the inflation rate as well as rising operational costs.
The power utility firm has signed power purchasing agreements with independent power producers, but such accords have been agreed at higher tariffs than existing charges.
“This is not sustainable and without a tariff increase, Zesco could default on the monthly payments which in turn would impact its customers adversely,” Mr Kapata said.
According to the presentation by Zesco acting managing director Bestty Phiri that was made during the public hearing on Tuesday, consumers that use up to 500 units per month would pay only 15 ngwee per kilowatt.