The Zimbabwe National Chamber of Commerce (ZNCC) Wednesday said the government should grant power producer, ZESA Holdings, authority to hike power tariffs and give impetus to its recapitalisation plan.
In a submission to the Finance and Economic Development ministry spelling out its expectations for the 2022 national budget, the ZNCC said low tariffs have held back ZESA from retooling.
The ZNCC said with sustainable tariffs, the State-run power utility could attract private investors. ZNCC said:
ZESA (must be allowed) charge cost-reflective tariffs that attract independent power producers (IPPs) in line with the IPP policy.
Promote alternative energy sources. We propose that the government maintains the customs duty on solar products at 0% for the financial year 2022.
With ageing power stations, ZESA has struggled to raise capital to revamp its struggling infrastructure.
Three of the State-run power producer’s power stations have been operating at about 10% of installed capacity.
The result has been rolling blackouts that have threatened growth targets, and also left domestic consumers in dire straits.
Pressure has been mounting on the broke government to bail out the power utility.
ZESA is undertaking the US$1.5 billion Hwange Thermal Power Station expansion alone, but with industries expecting to increase production in the coming years, analysts say this falls short of the capacity required to underpin industrial recovery.
While Zimbabwe’s power tariffs rank among the lowest in southern Africa, consumer rights groups have warned that a hike can worsen the socio-economic crisis in the country.