New power players welcome

HARARE - The introduction of independent power producers into Zimbabwe’s electricity sector will involve big changes, as what had been accepted as a natural monopoly starts the metamorphosis to an open, competitive electricity market.

We welcome the move by the Zimbabwe Energy Regulatory Authority (Zera) to license 10 independent power producers (IPPs) with a capacity to generate over 5 000 megawatts of electricity.

For the past decade, Zimbabwe has struggled with acute power outages due to the hydropower and thermal power plants that have been unable to provide reliable electricity because of fluctuating water levels, inefficiency and lack of investment in new equipment.

As a result of government’s poor foresight, the country is facing a huge power deficit which has impacted negatively on industry’s performance, with the country generating an average of 1 000 megawatts against a demand of 2 200 megawatts.

In a bid to make up for its faults and to compliment power generation at Kariba, Hwange and other small power stations, government has opened up the sector to independent power producers.

Zimbabwe is not alone in opening up the sector to private players as other governments in the region are increasingly opening up to partner with IPPs to develop power projects. This trend will immensely improve the sector by reducing the prevalent political risks of doing business, attracting increased investments by IPPs.

And while it is true that the present and future electricity requirements demand that the country admit independent power producers, we feel Zera needs to be careful and make all the efforts necessary to ensure that power tariffs are kept at minimum levels.

The independent power producers are in business to make profits and there is a danger that if there are no proper checks and balances, electricity will be very expensive for most people.

IPPs can be an expensive source of power, according to the World Bank, as they often inflate supply prices for utilities and government needs to mitigate against production costs.

The new players should be warned not to exploit Zimbabweans to reap outsized profits.

But we reiterate that even more power players are needed to make sure that Zimbabweans benefit from the competition.

Zimbabweans need quality service. - Staff Writer

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