Zimbabwe’s mining companies and farmers are resisting a proposal to raise electricity tariffs by 42 percent, arguing that the increase would hurt an economy struggling with low commodity prices and a drought.
The state-owned power supplier Zimbabwe Electricity Transmission and Distribution Company (ZETDC) said last month that it planned to increase tariffs from 9.86 cents per kilowatt to 14 cents to raise money for power imports.
Zimbabwe is producing only half of its peak power demand currently. The country has endured long blackouts, often lasting up to 18 hours, because of the power shortfall and has been unable to fully depend on imports from neighbours who also face deficits.
The Chamber of Mines of Zimbabwe, which represents the local units of Anglo American Platinum and Impala Platinum, the Confederation of Zimbabwe Industries and farmers’ groups are opposing a tariff increase.
ZETDC is owed $1 billion, a sign that consumers, including the mining industry, are already struggling to pay at current rates, the organisations said in a joint statement on Wednesday.
“At this stage the economy of Zimbabwe cannot have cost increases in any of the inputs. We strongly oppose the application for tariff increase by ZETDC,” the statement said.
Zimbabwe’s power shortages have increased because of a drought caused by the El Nino weather pattern, which has reduced water levels in southern Africa’s Lake Kariba to 12 percent of capacity.
Zimbabwe, as well as neighbouring Zambia, rely heavily on the hydroelectric Kariba dam for power. The dam is currently generating 285 megawatts (MW) out of a total capacity of 750 MW, according to ZETDC.
The Chamber of Mines and the Confederation of Zimbabwe Industries also said a government decision to build an emergency diesel power plant near Harare would make electricity expensive and should be scrapped.
Zimbabwe was generating 933 MW on Wednesday both from hydro and coal-fired power generation, less than half its peak demand, and importing up to 275 MW, according to data from ZETDC and Zimbabwe Power Company.