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Zimbabwe Treasury hikes power tariffs as power utility struggles

by Tichaona Chifamba HARARE Zimbabwe (Xinhua) -- Zimbabwe’s finance minister Mthuli Ncube on Thursday announced power tariff increases as power utility ZESA Holdings struggles to remain viable in a hostile economic environment.

He announced the increases while presenting the mid-term budget statement in Parliament.

Zimbabwe Finance Minister Mthuli Ncube | Coastweek

  The tariff for non-exporting businesses has been increased from 9.86 Zimbabwe cents/kWh to 45c/kWh, while domestic and agriculture consumers will now pay 27c/kWh, also from 9.86c/kWh, translating into about 3 U.S. cents/kWh.

Ncube, however, maintained the tariff for ferrochrome smelters and other miners at 0.067 U.S. cents/kWh and 0.0986 U.S. cents/kWh respectively with the resources being ring-fenced in a special account solely for the purposes of importing electricity.

This is the first time since 2011 that the power utility has been allowed to increase tariffs.

ZESA has also been allowed to bill all other exporters and foreign currency earners in foreign currency and ensure that the resources are also ring-fenced solely for the purposes of importing power.

HARARE Zimbabwe (Xinhua) -- Zimbabwe Finance Minister Mthuli Ncube arrives at the Parliament to present the mid-term budget statement in Harare. XINHUA PHOTO - SHAUN JUSA
ZESA’s subsidiary, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), had announced in a statement on the same day that it had applied for a tariff increase to cushion it from inflation and the harsh economic environment prevailing in the country.

Ncube said the government would soon launch the Renewable Energy Policy and Biofuels Policy which seek to create a well-balanced energy mix as a strategy to climate proofing of energy infrastructure in the country, taking advantage of its resource endowments in solar, coal, gas and hydro.


Zimbabwe government assures power supplies will improve

HARARE Zimbabwe (Xinhua) -- The power supply in Zimbabwe is expected to improve significantly as the government has started to make weekly payments to service its legacy debt with regional power utilities, the Herald reported Tuesday.

Secretary for Finance and Economic Development George Guvamatanga told a post-budget breakfast meeting in Harare Monday that arrangements that had been put in place should guarantee increased power supply beginning this week.

"In terms of the debt, I think the first installment was made last week (and) we are going to be making weekly installments for the legacy debts and we have also agreed that we pay on current basis for the supply of new imports," Guvamatanga said.

He said the government had also made arrangements with the private sector to "ring-fence adequate resources" to pay for at least 400 megawatts of electricity per month.

"We certainly expect the power situation, having concluded with one of the suppliers, to improve starting (Tuesday this week) or from Wednesday.

"We are going to be engaging other suppliers as well to try and see if we can put into place a similar structure," he said.

Zimbabwe owes South Africa’s Eskom and Mozambique’s Hidroelectrica de Cahora Bassa (HCB) about 74 million U.S. dollars, resulting in the two power utilities reducing power exports to the country.

Electricity generation at Kariba Hydro Power Station is now down to 180 MW, which is not enough to power the capital Harare alone.

Meanwhile, Zimbabwe Power Company (ZPC) business development manager Bernard Chizengeya on Monday expressed fears that Lake Kariba could be decommissioned next month as water levels were fast dwindling.

He said the country may be plunged into darkness by September or beginning of October unless solutions such as sustained imports to complement local generation are implemented.

He said Kariba Dam level is at 478m and power production will cease when it gets to 475m, which is likely to occur in September or October.


Zimbabwe power utility applies for tariff increase

by Tichaona Chifamba HARARE Zimbabwe (Xinhua) -- The Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a subsidiary of power utility ZESA Holdings, has applied for a tariff increase to cushion it from inflation and the harsh economic environment prevailing in the country.

A notice published by ZETDC Thursday said that the current tariff of 9.86 Zimbabwe cents/kWh had been severely eroded due to the prevailing economic environment and as of July 2019 the real tariff was approximately 1 U.S. cent/kWh against an average of 10 U.S. cents/kWh in the Southern African Development Community.

The utility has also been negatively affected by local inflation to the extent that its viability has been compromised.

"Further, local electricity production has been impacted by the low water levels in Lake Kariba which has restricted power production to an average capacity of 227 MW at the Kariba power station against the previous average of 750 MW," ZETDC said.

Justifying the application for a tariff increase, the utility showed major cost drivers in the electricity sector which were making current operations unsustainable.

Coal, which cost 26 Zimbabwe dollars per ton in Feb. 2019 was pegged at 230.20 dollars in July; diesel rose from 1.26 dollars per liter in February to 7.22 dollars in July; and the cost of Kariba water rose from 1.2 million dollars per month to 10.56 million dollars per month.

The Zimbabwe National Chamber of Commerce (ZNCC) has already put its weight behind the push to allow the power utility to increase the tariff, in view of the crippling power shortage and an unsustainable power tariff structure.

ZNCC chairperson Mike Kamungeremu said they were comfortable with a tariff of up to 14 U.S. cents/kWh.

ZETDC last increased tariffs in 2011 and has over the years been calling for tariff reviews which the government, through the Zimbabwe Energy Regulatory Authority, has been shooting down.

Energy and Power Development Minister Fortune Chasi has also been agitating for tariff increases, saying that the current pricing structure was unsustainable and did not reflect the true cost of generating and supplying electricity.

The Confederation of Zimbabwe Industries, which had over the years advocated for tariffs to be reduced, also recently called for tariff hikes as a way of helping reduce the prevailing power crisis where some areas are going for up to 18 hours without electricity.

Zimbabwe finance minister proposes supplementary budget

by Tichaona Chifamba HARARE Zimbabwe (Xinhua) -- Zimbabwe’s finance minister Mthuli Ncube on Thursday proposed a supplementary mid-term budget of 10.85 billion Zimbabwe dollars.

The move is believed to be in a bid to align the Macro-Fiscal framework with fiscal and monetary policy pronouncements made by the government between Janurary and June 2019.

Presenting the supplementary budget in Parliament, he said the Mid-Year Review provided an updated 2019 Fiscal Framework with projected total expenditures of 18.62 billion dollars, against anticipated revenue collections of 14.1 billion dollars.

"The projected expenditures are inclusive of a proposed supplementary budget of 10.85 billion Zimbabwe dollars," he said.

Among the highlights is the proposed repealing of the Indigenization and Economic Empowerment Act and replacing it with the Economic Empowerment Act, which will be consistent with the current thrust "Zimbabwe is Open for Business."

Monthly revenue collections for the first six months generally performed above targets by an average of 139.9 million dollars to give cumulative revenues of 4.99 billion dollars, against a target of 4.15 billion dollars and giving a positive variance of 20.2 percent.

On the other hand, total government spending for the period January to June 2019 was 4.2 billion dollars against a target of 3.7 billion dollars.

The government was running high fiscal deficits, which were monetized through issuance of Treasury Bills and overdrafts at the Reserve Bank of Zimbabwe, which translated into a significant and uncontrolled expansion of money supply which ended up chasing foreign currency in both the formal and parallel markets.

Zimbabwe weather authority issues alert
over earthquakes due to low water levels

by Tichaona Chifamba HARARE Zimbabwe (Xinhua) -- The receding water level in Lake Kariba has resulted in increased earthquake activity in its environs, with the latest being a 3.5 magnitude moderate quake that hit Kariba and surrounding areas last Friday, state media reported Wednesday.

The Meteorological Services Department’s Seismology Center has now called on people in Kariba and surrounding areas to be on high alert and exercise caution in the event of an earthquake.

At least six earthquakes, ranging between 3.3 and 3.9 in magnitude, have been recorded so far this year, with five of them taking place in July.

All the five quakes occurred around the Hurungwe area, which is believed to be along a dormant extension of the East African Rift system.

The increase in earthquakes has also coincided with the rapid decline in water levels in Kariba Dam.

Seismologist Kwangwari Marimira at the Zimbabwe National Data Centre at Goetz Observatory in Bulawayo confirmed last Friday’s earthquake.

"An earthquake of magnitude 3.5 was felt in Kariba on the 26th of July 2019 at 05:19am local time," he said.

"The epicentre of the earthquake was determined to be about longitude 15.915S and latitude 30.261E," he told The Herald newspaper.

  Zimbabwea President Emmerson Mnangagwa cuts a ribbon during a handover ceremony of buses in Harare | Coastweek

HARARE Zimbabwe (Xinhua) -- Zimbabwea President Emmerson Mnangagwa cuts a ribbon during a handover ceremony of buses in Harare. Emmerson Mnangagwa on Wednesday commissioned 47 new buses that were added to the Zimbabwe United Passenger Company (ZUPCO) fleet. XINHUA PHOTO - SHAUN JUSA

Marimira confirmed that seismic activity which related to natural or man-made vibrations of the earth increased when there was a significant change in the volume of water in the lake.

"It was observed that the seismic activity in the area increased significantly during and after the impoundment," he said.

"These earthquakes in terms of magnitudes can be classified as moderate," he said.

The water level at Lake Kariba, which hosts Zimbabwe and Zambia’s anchor hydro power stations, continues to decline and is now below 30 percent of capacity because of the drought that hit Southern Africa during the 2018/19 season.



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