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Zambia: Country Faced With

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Zambia: Country Faced With

by AllAfrica.com

MORE than the impending electricity deficit facing Zambia and the whole Southern African region, the most disquieting thing must be the reticence of the local business community in exploiting the potential for private sector investment in this sector.

The fact that Zambia is faced with a power deficit has been made known for nearly the past decade.

Unfortunately, the Zambian private sector appears to have been content to look at this as a problem for Zesco. Thus it has become fashionable to dismiss every problem in the electricity sector as attributable only to Zesco inefficiencies.

But whatever inefficiencies are perceived to plague Zesco cannot be the full explanation and reason why the country faces this much publicised power deficit.

These problems have resulted from a combination of the effects of the Zesco monopoly, and decades of price control policies that kept electricity tariffs at below cost recovery levels.

But now there is no escaping the reckoning: Zesco faces the prospect of near collapse if forced to continue charging uneconomic electricity tariffs and, on top of this, demand for electricity seems set to outstrip generation and supply capacity because of the current economic boom brought about by significant investments in the mining industry.

This is where the local business community appears to have shirked its responsibility. A forward-looking local business community should have been the first to see the opportunities for investment in the energy sector.

Granted power generation projects are large scale and require vast amounts of money. But mobilisation of such is not an impossible task, except that the local business community has placed limits on their own capabilities and has been waiting for the Government and Zesco to do everything.

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Well, Zesco is doing something about it. Yesterday, the company signed an agreement with Sino Hydro of China for the Kariba North Bank extension project that is expected to give Zambia an additional 360 megawatts.

Instead of the local business community simply folding its arms and complaining about Zesco tariffs, they should set about evaluating options still open for private sector involvement in additional generation capacity.

Very soon foreign investors will see this potential and mobilise international financing for large scale power generation projects - and the local business people will complain all the more about foreigners taking away the choice investments.

 

 
 
 
 
 
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