LUSAKA (Reuters) – Zambia’s state power firm Zesco will hike the price of electricity for residential and commercial customers starting next month as the African nation seeks to attract investment into power generation, the energy regulator said.
Zambia’s Energy Regulation Board said it had allowed Zesco to increase electricity tariffs for the least consuming residential customers by more than 200%.
Zambia’s electricity supply shortage increased to 810 megawatts (MW) in November from around 750 MW in September, state power firm Zesco said on Dec. 12, adding it would quickly commission new power plants to plug the gap.
The new measure will not affect global mining firms including First Quantum Minerals, Glencore, Barrick Gold Corp and Vedanta Resources which currently pay a flat tariff of 9.30 U.S. cents/kilowatt hour (kWh).
The price of electricity for many categories of commercial customers would nearly double, the energy regulator said, adding that Zesco needed revenue to cover its operating costs.
“Zesco is facing serious financial problems with regard to its profitability, liquidity, solvency and efficiency,” it said.
Africa’s no.2 copper producer has seen electricity supply dwindle due to low water levels at hydropower dams as a severe drought sweeps through southern Africa due to climate change.
In September Zambia said it would import 300 MW of power from South Africa’s Eskom, which itself is struggling with generation problems and has been implementing power cuts, putting imports under pressure.