ZESA hikes electricity tariffs; Industry rejects move

The Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a subsidiary of the Zimbabwe Electricity Supply Authority (ZESA) has increased electricity tariffs with effect from 06 October 2022.

In a public notice, ZETDC said consumers will get the following on their first purchase (domestic tariff):

50 Units / kWh – $912.00

100 Units / kWh – $2 740.00

150 Units / kWh – $5 943.00

200 Units / kWh – $9 147.00

250 Units / kWh – $13 720.00

300 Units / kWh – $18 295.00

350 Units / kWh – $23 550.00

400 Units / kWh – $28 806.00

450 Units / kWh – $34 290.00

500 Units / kWh – $39 780.00

600 Units / kWh – $50 750.00

700 Units / kWh – $61 720.00

800 Units / kWh – $72 695.00

900 Units / kWh – $83 670.00

1000 Units / kWh – $94 640.00

CONSUMPTION BAND ENERGY CHG PER kWh AMOUNT
First 50 0-50kWh 50kWh 18.24 912
Next 50 51-100kWI 50kWh 36.57 1828.5
Next 100 101-200 100kWh 64.07 6407
Next 100 201-300kW 100kWh 91.47 9147
Next 100 301-400kW 100kWh 105.12 10512
Above 400 109.70

Before the latest tariff hike by ZESA, the power utility last reviewed power costs on 21 September 2022. The old tariffs are as follows:
50 Units / kWh – $750.00

100 Units / kWh – $2 252.00

150 Units / kWh – $4 885.00

200 Units / kWh – $7 515.00

250 Units / kWh – $11 275.00

300 Units / kWh – $15 035.00

350 Units / kWh – $19 360.00

400 Units / kWh – $23 680.00

450 Units / kWh – $28 190.00

500 Units / kWh – $32 700.00

600 Units / kWh – $41 715.00

700 Units / kWh – $50 735.00

800 Units / kWh – $59 755.00

900 Units / kWh – $68 780.00

1000 Units / kWh – $77 800.00

CONSUMPTION BAND ENERGY CHG PER kWh AMOUNT
First 50 0-50kWh 50kWh 15.00 750
Next 50 51-100kWI 50kWh 30.04 1502
Next 100 101-200 100kWh 52.64 5264
Next 100 201-300kW 100kWh 75.15 7515
Next 100 301-400kW 100kWh 86.49 8649
Above 400 90.14

Meanwhile, industry has rejected ZESA’s proposal for an unprecedented electricity tariff hike in United States dollars saying it would create a miserable situation for companies already battling to remain afloat.

Business Times reports that ZESA proposed to review upwards its electricity tariff to US$0.1221 per kilowatt hour (kWh) from the current US$0.0981 per kWh for electricity to be available.

The proposal was tabled last week in a crisis meeting with industry representative bodies including the Confederation of Zimbabwe Industries (CZI), the Zimbabwe National Chamber of Commerce (ZNCC) and Chamber of Mines of Zimbabwe.

ZESA told captains of industry that it will give preferential treatment to businesses that are willing to pay US$0.1221/kWh.

But, captains of the industry argued that most manufacturing companies have no capacity to pay the reviewed US$ tariff as they are dependent upon the Reserve Bank of Zimbabwe’s foreign currency system to access forex.

“Industry does not have capacity to pay such a tariff,” CZI president, Kurai Matsheza, told Business Times.

“As you know we have predominantly participated in the forex auction system to access forex hence an US$0.12 tariff is very difficult for the members.”

Matsheza said with his members grappling with forex shortages, high cost of production and liquidity crunch, industry will struggle to maintain the 56.25% capacity utilisation.

The industry’s exports were around US$176m last year from around US$200m the previous year, with the manufacturers able to supply close to 70% of products on local shelves.

“If this demand persists, this will certainly cripple the manufacturing industry and this is not a good development,” Matsheza said.

“ZESA has to ensure the power is back to enable the productive sector to get back on its foot.”

ZNCC president, Mike Kamungeremu told Business Times that the proposal by ZESA was not welcome as most companies do not have the capacity to operate with such huge costs.

“Most of the members are struggling to meet ZESA’s demands and this will take a knock on most companies. Only big corporations have agreed to pay such huge amounts,” Kamungeremu said, adding: “The situation is very tough for manufacturers.”

He said exporters were already paying in US$ with some paying the percentage of their exports.

Zwnews