Monday, September 1, 2008

Congo to raise Zambia power exports by 186%

Congo's state-power utility plans to raise tariff charges for power exports to Zambia by 186%, a senior energy official said on Friday.

Zambia imports some power from the Democratic Republic of Congo (DRC) to run its vast copper and cobalt mines. The southern African nation is Africa's top producer of copper.

An independent energy industry source told Reuters that Snel, the DRC state power utility, intended to raise tariffs to 4 cents per kilowatt hour (kWh) from 1,4 cents per KWh.

"Snel has proposed to raise the tariffs to 4 cents per kWh from 1,4 cents per kWh," the energy industry source said on condition of anonymity.

"This will obviously create a huge strain on Zesco's (Zambia's power utility) power import bill and our calculations are that Zesco will need to charge 6 cents per kWh to sustain power imports."

State owned Zesco spokeswoman Lucy Zimba said the new rates were yet to be agreed.

"The rates are still under discussion as the negotiations have not been concluded. It would be incorrect to divulge the figures before agreement is reached by the parties," Zimba told Reuters.

Zimba said Zesco would not immediately pass on the cost of the extra bill in power imports to customers, who include the copper mines, manufacturing industry and domestic consumers because of a recent tariff hike earlier in the year.

Zesco raised tariffs a few months ago after the country's power regulator allowed it to lift the tariffs in two phases, with the second increase expected to be effected early in 2009.

"There will be no immediate negative impact on the local customers," Zimba said. "A positive impact of securing imports would be that the load shedding (power rationing) would be reduced."

Zambia has been rationing power since January following a deficit which has partially been caused by a shutdown of some generators at the Kafue hydro power plant.

Zesco and power distributor the Copperbelt Energy Company, which distributes electric power to the mines, are currently importing power from the DRC to plug the deficit.

Zambia's current peak national power demand is 1 450 MW and only around 1 250 MW is generated, with the balance met via imports from the Congo. Zesco also rations power if imports are reduced by the Congo to meet internal demand.

Zambia also exports in excess of 250 MW of power during the off-peak hours at night.