By David McKay for Mining Mx
Zambia is to import 300MW of electricity from Eskom, the South African power utility, for six months in order to ease shortages, said Reuters.
Citing Webster Musonda, MD of Zambia’s electricity company, Zesco, Reuters said imports would begin on 1 October and would cost about $22m per month. “The negotiations have been concluded and we have an offer on the table. We will spread the cost of importing this power to our customers,” says Musonda.
Africa’s second largest copper producer, Zambia has a power deficit of more than 750MW because of low water levels at hydropower dams, said Reuters. Zambia last week announced it would increase the hours for power rationing as water levels continued to fall.
Zambia has historically priced electricity below the cost of production through subsidies. Only in recent years has the country started to gradually raise prices.
In 2017, the country’s energy regulator approved a 75% price hike for electricity retail consumers and introduced a flat 9.30 US cents per kilowatt hour tariff for mining companies, said Reuters.
Zambia’s president, Edgar Lungu, said in June the country was not slipping into a sovereign debt crisis. “Zambia is not in a position of a crisis,” he told Bloomberg News. “When you find that you are being strangled by debt, you hold back and see how you can realign your position so that in the end you continue being alive, you don’t suffocate.
“That’s where we are now,” he said.
According to the International Monetary Fund, Zambia is growing at the slowest pace in two decades. A drought has lowered water levels at hydroelectric dams whilst earnings from copper – its main export – have slumped following a decline in metal pricing.