Copperbelt Energy Corporation (CEC) may be forced out of business as early as March 2020 if a new Bulk Supply Agreement with ZESCO is not signed, company Plc Chief Executive Officer Owen Silavwe has revealed.
And some Ministry of Energy officials have said Zesco has been instructed not to renew the agreement by some “high ranking” government officials on suspicion that CEC funds the opposition UPND.
CEC is listed on the Lusaka Securities Exchange with majority shares owned by Standard Chartered Private Equity Limited and ZCCM IH.
The current Bulk Supply Agreement signed almost 20 years ago between CEC and ZESCO is expiring in March 2020.
But in a recent interview in Kitwe, Mr Silavwe said the delays in finalising agreement with ZESCO is threatening CEC’s existence.
Mr Silavwe explained that failure to renew the agreement with Zesco before March next year would spell doom for the Copperbelt as a whole.
He said CEC currently supplies electricity to all the mining companies with Konkola Copper Mines as its biggest client consuming the largest chunk of power from its network.
“We supply the power to everybody on the Copperbelt so it’s a question of how are we going to ensure that we do this in a way that will not antagonize the sector or the economy, I think that for me is quite critical,” he said.
“And I don’t think we have any challenges in achieving that in a very amicable and efficient way. I think what I would say is there is work that’s going on at the moment and that work is meant to find a solution to this. The Bulk Supply Agreement underpins the supply of power to everybody in the Copperbelt; it’s not just the mines, basically everybody on the Copperbelt. So, my view on it is that whichever way you look at it, a solution has to be found, if renewal is the solution, then so be it. But the critical takeaway is that a solution needs to be found, otherwise come that, day, nobody would want to see challenges on the Copperbelt, and basically challenges to the economy,” Mr. Silavwe said.
He added, “So, we should try, as a country, to avoid dooms day! I don’t think we plan for dooms day. We are working on it, but we don’t have a conclusion today. The fact is process is ongoing, today. It’s not about what I want to see, it what is mutually agreed between the parties at the end of the day, that is important.”
But some sources at the Ministry of Energy have revealed that there is pressure from some high ranking government officials for Zesco not to renew the agreement with CEC.
The sources said the officials have convinced Energy Minister Mathew Nkhuwa to prevail over the Zesco Board to renegade on the agreement and not a renew to CEC on the pretext that CEC bankrolls the UPND.
“You see there is a strong belief that CEC funds the UPND and the people in power are saying that why should ZESCO continue selling cheap electricity to CEC which is making huge profits that is now being used to fund the UPND,” the source said.
Efforts to reach Mr Nkhuwa proved futile by the time of publishing.