By Bennie Mundando
GOVERNMENT says it seeks to finalise and approve the reform plan for Zesco to stabilise power supply and address liquidity challenges at the company by end 2021.
Accordant to the Economic Recovery Plan (ERP) 2020 – 2023, Government acknowledged energy as the principal enabler for restoring growth and achieving economic diversification in the medium-term.
It said that during the ERP, it will continue implementing reforms to improve efficiency and transparency as well as enhance the sector’s support to growth and that the reform program will include policy on management of arrears in the energy sector to ensure sustainability.
It said the reforms will also include revision of pricing mechanisms in the petroleum sub-sector that will take into account external factors such as exchange rate fluctuations to ensure full cost recovery.
“(Under) Zesco reforms, the action required is to finalise and approve the reform plan for Zesco to stabilise power supply and address liquidity challenges at Zesco by end 2021,” read the ERP in part.
Government also said it wanted the Cost of Service (CoS) study to be completed by March 2021 to facilitate cost-reflective tariffs in the sector and on re-negotiation of Independent Power Producer (IPP) tariffs, Government said it wanted to facilitate the re-negotiation of Power Purchase Agreements of the Independent Power Producers to give financial stability to Zesco by 2021.
On the other hand, through the completion of the Kafue George Lower Power Project, Government said it wanted to expedite the completion of the Kafue George Lower Power Station to increase electricity generation by the end of 2021 with the first unit being operational before the end of 2020.
On Energy reforms, Government said it wanted to develop regulations for open market access to give opportunity to other off-takers in line with the Electricity Act No.11 of 2019.
It also said it wanted to develop the multiyear tariff adjustment framework once the Cost of Service study had been finalised.
It also indicated that it wanted to develop an integrated energy resource plan to inform the energy mix and explore the possibility of establishing the Zambia-Democratic Republic of Congo River Authority by 2023.