Financial News

ZESA to increase prices 9 fold

Zesa wants to convert its old 9,83 cent kilowatt hour to RTGS dollars at the interbank rate, a near 9-fold increase to almost $1 a unit.

Zesa is seeking Government approval for customers to pay the interbank rate equivalent of the 9,83 US cents per kilowatt hour (kWh) tariff, in order to cushion itself from the rising operating costs, according to chief executive Patrick Chivaura.

This comes as costs of operating thermal power stations have risen sharply after coal producers started pegging the US dollar linked price of the commodity using the interbank rate.

Coal producers have maintained the price at US$26,50 per tonne, but it is pegged to the ruling interbank rate, which stood at $8,89 against the greenback yesterday.

At yesterday’s exchange rate, the proposal would see the tariff rising by 790 percent.

Chivaura told Business Weekly in an interview this week the tariff had “been degraded so badly” with the power utility now essentially providing a service for “free”.

In US dollar terms, the power tariff has been eroded to a cent from 9,6 cents approved in 2013.

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