In Zimbabwe, Zesa, the national electricity company, is asking for a further increase in the electricity tariff. Recently applied exchange rates make the going rate unprofitable, threatening the company and its ability to maintain its facilities.
In Zimbabwe, Zesa Holding, the group in charge of supplying electricity, is demanding an increase in the price for the sale of energy to its subscribers. Lovemore Chinaka, the interim executive director of ZETDC, its distribution arm, told Parliament that the current tariff is not profitable.
It is about 2.3 cents of a dollar per kilowatt hour, whereas it would take 10 cents per kilowatt hour for the company to break even. The fall in the exchange rate since the last tariff increase has largely contributed to this situation, threatening the viability of the Zesa.
“The long-term impact this will have is that we will no longer be able to maintain or repair the failures that will inevitably occur on transformers or power lines due to their obsolescence,” concluded the manager.
Source: Agence Ecofin