File Photo: Kariba Power Station

STAKEHOLDERS have strongly rejected the proposal made by ZESCO to the Energy Regulation Board (ERB) to hike electricity tariffs saying the move will increase production costs, scare away investors and slow down the country’s economic growth.

ZESCO has made a proposal to ERB to increase electricity tariffs by an average of 113 per cent across board and a further 213 per cent on connection fee.

Speaking during the hearing that was organised by ERB on Tuesday, November 5, 2019, at the Mulungushi International Conference Centre, stakeholders who were drawn from various sectors of the economy believe that the hiking of tariffs will affect the growth of business and subsequent slow down economic growth.

Zambia Sugar Company, which entirely depend on electricity for production stated through its representative Graham Rolfe said that ZESCO should consider a gradual approach to tariff increment to minimise the effects of the measure on the economy.

Rolfe said a gradual increment will enable Zambians cope up with the high energy costs and allow businesses to survive.

And Lafarge Cement, who spoke through their representative Obert Nkandu, opposed the move saying it would double production costs, make products uncompetitive on both the Zambian and international market and further deter investments in the energy sector.

He said the increment should be done in a phased manner to allow companies deal with the high costs of power.

Meanwhile, Universal Mining and Chemicals Industrial Limited Henry Kaoma said in view of the excessive demand for steel, unstable power supply was disrupting production and supply on the market.

He said ZESCO should strike a balance between supply and costs in order to attract more investors in the country.

Kaoma said by increasing electricity tariffs ZESCO will kill the economy of steel dependant towns like Kafue.

But ZESCO Acting Managing Director Webster Musonda said the one-off increment was the only way to deal with the rising costs of power generation, transmission and supply.

He said the proposed tariff increment was critical to increasing ZESCO’s ability to finance infrastructure expansion and pay Independent Power Producers (IPP).

Musonda said ZESCO currently has huge power projects which required more finances and for them to do this there is need to make tariffs cost reflective as this will attract investors.

Meanwhile, ERB Chairperson Raymond Mpundu said the board would deliver the decision within the cost of this months on the tariff increment plan that was submitted in April this year.

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