Zambia's Zesco Aims to Double Electricity Cost

Zambia's state power utility Zesco Ltd has applied to the regulator to allow it to more than double the cost of electricity for all customers except mining firms to attract investors to build power plants, it said on Monday.

Zambia's economy is likely to grow by less than 5 percent in 2015 due to a power crunch that has hit output from mining firms, already grappling with a slide in global copper prices.

Zesco had also been compelled to increase the cost of electricity due to rising costs a depreciation of the kwacha currency, which had pushed up costs for imports, it said.

The kwacha on Monday gained more than 2 percent against the dollar. The unit fell more than 17 percent against the dollar last Monday, its biggest one-day fall on record, as the price of Zambia's main export copper hit a one-month low.

A spokeswoman for Zambia's Energy Regulation Board (ERB), which has to approve Zesco's proposal, told Reuters the regulator would issue a statement later this week.

Zesco said the cost of electricity for commercial users will increase from Nov. 1 to 0.88 kwacha per kilowatt hour (KWh) from 0.31 kwacha per Kwh should it get the go-ahead to raise tariffs.

"The new tariff is intended to attract a multi billion dollar portfolio of generation projects," it said in a statement.

The fixed monthly charge for commercial users will rise to 156 kwacha from the current 55 kwacha, it said.

Residential users consuming above 500 KWh per month would have to pay 1.54 kwacha per KWh from 0.51 kwacha per KWh and the fixed monthly charge would rise to 54.88 kwacha from 18.23 kwacha.

Investments worth about $4.3 billion were expected to begin over the next 12 months and these would add 1,673 MW to Zambia's national grid once completed, Zesco said.

The planned power generation projects included renewable energy, solar power plants and thermal power plants, which are not affected by drought, Zesco said.

(By Chris Mfula)