FILE PHOTO: Reserve Bank of Zimbabwe Governor Mangudya and Zimbabwe's Finance Minister Ncube.
HARARE - Zimbabwe's finance minister Mthuli Ncube on Thursday announced power tariff increases as power utility ZESA Holdings struggles to remain viable in a hostile economic environment.

He announced the increases while presenting the mid-term budget statement in Parliament. The tariff for non-exporting businesses has been increased from 9.86 Zimbabwe cents/kWh to 45c/kWh, while domestic and agriculture consumers will now pay 27c/kWh, also from 9.86c/kWh, translating into about 3 UScents/kWh.

Ncube, however, maintained the tariff for ferrochrome smelters and other miners at 0.067 US cents/kWh and 0.0986 US cents/kWh respectively with the resources being ring-fenced in a special account solely for the purposes of importing electricity.

This is the first time since 2011 that the power utility has been allowed to increase tariffs. 

ZESA has also been allowed to bill all other exporters and foreign currency earners in foreign currency and ensure that the resources are also ring-fenced solely for the purposes of importing power.

ZESA's subsidiary, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), had announced in a statement on the same day that it had applied for a tariff increase to cushion it from inflation and the harsh economic environment prevailing in the country.

Ncube said the government would soon launch the Renewable Energy Policy and Biofuels Policy which seek to create a well-balanced energy mix as a strategy to climate proofing of energy infrastructure in the country, taking advantage of its resource endowments in solar, coal, gas and hydro.

XINHUA