By 
As an energy expert in Zambia, I am often asked about the feasibility of ZESCO’s promises and the challenges the utility faces.
The recent emergency tariff, effective from November 1, 2024, has sparked significant debate.
Here, I will explore whether ZESCO can realistically provide the seven hours of electricity it promised, considering the current challenges and financial instability.
Feasibility of the Emergency Tariff
The emergency tariff was introduced to address the immediate power supply gap caused by drought-induced hydropower generation deficits.
ZESCO has been importing electricity from neighboring countries, which is costly. The tariff aims to raise funds to secure these imports and improve power availability.
However, several challenges hinder its feasibility:
1. Financial Constraints: ZESCO’s financial health has been severely strained by the high costs of imported power and the need to maintain infrastructure.
2. Operational Challenges: The utility faces logistical issues in managing power imports and distribution efficiently¹.
3. Public Resistance: Higher tariffs have met with resistance from consumers, complicating the implementation process.
The benefits of the emergency tariff, such as improved power availability, may start to be seen within a few months if the funds are effectively utilized to secure and distribute additional power.
Timing of the Emergency Tariff
The emergency tariff was indeed implemented later than ideal. The prolonged delay exacerbated ZESCO’s financial instability, as the utility continued to incur losses without the necessary revenue to cover costs.
This delay has had several negative impacts:
1. Increased Debt: ZESCO’s debt levels have risen due to the need to finance power imports and operational costs without adequate revenue.
2. Service Disruptions: The financial strain has led to frequent power outages and unreliable service, affecting both residential and commercial users.
Stabilizing the Energy Sector
Given the current financial crisis, stabilizing Zambia’s energy sector will require a multifaceted approach. Realistically, it may take several years to achieve stability.
Key steps include: 1. Financial Restructuring*: Addressing ZESCO’s debt and improving its financial management.
2. Infrastructure Investment: Investing in infrastructure to enhance power generation and distribution capabilities.
3. Policy Reforms: Implementing policies that support sustainable energy practices and financial stability.
The Need for Cost-Reflective Tariffs
There is a desperate need for the Energy Regulation Board (ERB) to implement cost-reflective tariffs.
These tariffs are crucial for several reasons:
1. Financial Viability: Cost-reflective tariffs ensure that ZESCO can cover its operational costs and invest in infrastructure improvements.
2. Reduced Subsidies: They reduce the dependency on government subsidies, allowing for more sustainable financial practices.
3. Improved Service: With better financial health, ZESCO can provide more reliable electricity, benefiting the economy and improving quality of life.
While the benefits of cost-reflective tariffs outweigh the challenges, implementation has been slow due to political and social resistance.
Consumers are often reluctant to accept higher electricity prices, and there is a need for greater public awareness and engagement to facilitate this transition.
In conclusion, while ZESCO’s promise of seven hours of electricity is ambitious, it faces significant challenges.
The emergency tariff is a step in the right direction, but timely implementation and broader reforms are essential for long-term stability and reliability in Zambia’s energy sector.
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