Source: Zera, ZETDC iron out proposed private sector power retail deal -Newsday Zimbabwe
THE Zimbabwe Energy Regulatory Authority (Zera) and the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) are now working on modalities to allow private firms to sell and distribute electricity, following last week’s announcement.
Last week, it was announced by the authorities that they were looking to allow private companies to come into the electricity retail space by allowing them to sell directly to consumers.
Under the proposed initiative, businesses will apply for licences to buy electricity from suppliers like Zesa Holdings or independent power producers for resale to homes or companies within specified zones.
The move was introduced to help achieve the government’s vision of achieving universal access to electricity by 2030 and attract investments in electricity secondary distribution infrastructure.
“The modalities of how this will roll out are still in process. The regulator and the utility are working on this,” Zera chief executive officer Edington Mazambani told NewsDay Business in an interview.
“The move aims to attract investments in electricity secondary distribution infrastructure in terms of Section 44 of the Electricity Act with a focus on improving efficiency in the supply of electricity to households.”
The new model will enable private sector participation, with licensed companies distributing and retailing electricity in underserved areas, complementing the work of ZETDC, the distribution arm of Zesa Holdings.
To ensure the success of this initiative, potential licensees should demonstrate technical and financial capacity to develop, operate and retail electricity.
These potential licensees should also comply with the country’s statutes, regulatory standards and guidelines.
The collaboration between ZETDC and potential licensees will provide electricity backbone infrastructure, including transmission lines and substations, into new residential developments.
“It is envisaged that new investments will facilitate rapid infrastructure development, with reduced costs to the government, while integrating renewable energy sources into the national grid,” Mazambani said.
In May, it was revealed that Zesa Holdings has capital requirements of US$2 billion, which is limiting its ability to provide steady power.
Hence, by allowing private companies to participate, this will help raise capital to meet the needs of the power utility.
The proposed initiative comes at a time when Zimbabwe’s peak electricity demand exceeds 2 000 megawatts (MW), yet generation remains unstable, fluctuating between 1 200MW and 1 400MW due to capacity limitations at the Kariba and Hwange power stations.
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