Q FM Africa's Modern Radio
ZESCO Limited’s heavy indebtedness has been laid bare with the utility company owing US$3.5 billion as at September 2021.
In a ministerial statement to Parliament today on ZESCO’s debt position and measures being put in place to improve the utility’s financial position, Energy Minister Chibwe Kapala says ZESCO’s debt is largely due to costly emergency power imports and increased use of independent power producers generated power which is at a higher tariff.
Mr Kapala says the imported power was procured at triple the price of ZESCO’s average electricity selling price, and that the differential was not passed on to customers through an upward tariff adjustment.
He adds that ZESCO currently buys power from independent power producers at an average tariff of 11 cents per kilowatt hour and sells the same at 7 cents per kilowatt hour to its customers.
Mr Kapala says ZESCO owes independent power producers such as Maamba Collieries, Ndola Energy and Itezhi tezhi Power Corporation $1.1 billion in unsettled dues for power supplied to the utility.
And Mr Kapala says ZESCO made a loss of $432 million between 2018 and 2020 as a result of the kwacha’s depreciation against the US Dollar.
He says the utility makes losses whenever the Kwacha depreciates against the US dollar.
Mr Kapala states that ZESCO has embarked on a turnaround strategy to improve its financial position which seeks to stabilize, recover and improve the company’s financial performance during the period 2021 to 2025.