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Alba Iulia
Wednesday, February 19, 2020

Felix Mutati calls on the authorities to urgently resolve the ZESCO and CEC impasse

Economy Felix Mutati calls on the authorities to urgently resolve the ZESCO...

Former Finance Minister Felix Mutati has called on Authorities to urgently resolve the impasse between power utility company Zesco and the Copperbelt Energy Corporation.

Mr Mutati says the impasse will not only hurt the revenues of Zesco but will also compromise the ability of the company to be able to raise financing that are critical for Zesco’s operations going forward.

He noted that current lenders into Zesco are also anxious to see that there is a credible way forward on the matter while CEC may suffer job losses.

Mr Mutati said apart from threatening the security of supply to the mining sector, Zambia may erode broader investor confidence in the economy.

He said for the mining sector, the anxiety may create uncertainty in the investment front affecting copper production which affects the exchange rate.

Mr Mutati has urged the Minister of Energy Mathew Nkhuwa to put in place interim power supply agreements as the impasse is being resolved adding that government should also complete the cost of service study.

He said the Cost of Service study will define the margins that players in the energy sector will be able to harvest and anchor the security of supply and inject investor confidence for players in the mining sector.

Mr Mutati said Zambia already has a lot of economic challenges and cannot add more challenges that create anxiety among investors saying this will be costly to the nation.

[Read 2,211 times, 1 reads today]

27 COMMENTS

  1. MMD’s true president.

    So all stakeholders obviously namumfwa.

    Zesco should humble itself for the time being.
    CEC must invest heavily in power generation and supply. Especially generation in medium to long term basis.
    Government must ensure that it implements various incentives including tax holidays in the short term to medium term towards CEC so that it establishes and builds capacity for itself in the long term.
    I will be fine if dollars going to Maamba Colleries went to CEC.

  2. ZESCO can supply directly to the mines. CEC missed this opportunity by not putting up a generation plant. This agreement disadvantages ZESCO as it takes away revenue.

  3. Why can’t all the mines just have their own solar power plants than to depend on Zesco I think that can be a good idea.

  4. People are really politicising this issue. Put your money where your mouth is. For me i have already agreed to give away my range rover and run naked from mandahill to arcades if pf lose in 2021. Can hh or any other opposition official pledge the same ?

  5. CEC is a conduit for raising campaign money for UPND. Govt should not renew this agreement. ZESCO can supply directly to the mines.

  6. We know the shareholders of CEC. They are key members of the UPND who should not be allowed to use CEC funds for UPND campaigns!

  7. It was your MMD government that decided to sell CEC which was part of ZCCM as Power division as a separate entity, perhaps under advice from HH instead of it becoming part of ZESCO. You reap what you sow.

  8. Please can you let those guys in white coats visit Kaiser Zulu ! They should bring a stray jacket or a taster gun and kindly book a bed at chainama.

  9. It is important to look at this issue at a broader point of view. Iam saddened to note that the argument is narrowing on the political affiliation of the shareholders of CEC. Admittedly the shareholders can be pro UPND but basing the decision to cancel the agreement on the basis of political affiliation is not only immature but also very dangerous. What will happen tomorrow if our perceived villains in opposition becomes masters in power, should they also destabilize the economy by putting stumbling blocks on all entities which are pro PF? This is the problem I have with African politics. We never look at the bigger picture. It is all about fixing who ever seems to threaten my hold on political power. It is so despicable!

  10. For those not in the know, we used to pay utility bills to the town council; water and electricity. And it worked just fine. CEC is the only surviving remnant of that era as a distributor and it is already showing how things ought to be, politics aside, guys, we need the discipline of running our societies. Bacuula pafula!

  11. Yes zesco can supply directly but CEC already has the infrastructure in place, particularly on the copperbelt. Question is, is zesco in a position to put up their own transmission infrastructure or are they going to have to lease existing cec transmission infrastructure? Zesco must first get it’s own house in order, before they become too greedy.

  12. @ kalaba & njolomba. Who told you that Zambia is only for PF members and supporters? We are a one party dictatorship! Stupid thinking! Shaa!

  13. CEC is owned by UPND supporters. It had to go as will be a number of them funding UPND. Madison Asset Management is next to closed and Sikutea demeaned.

  14. Why is Mr Mutati being economi al with information he knows? Mr Mutati should first acknowledge that the privatisation deal of CEC has never benefited Zambians except for few individuals who are shareholders and 300+ employees. This is at the expense of the rest of citizens who pay economical rates for electricity whilst CEC has been getting electricity at the same price for 20 years. Where is that done Mr Mutati. Ala mule kwatako uluse mwebantu. Politics without empathy. Zesco must either buy the assets of CEC and take the 300 staff or CEC must buy electricity at industrial rates from Zesco. How they sell to the mines and what follows is their business decision to make.

  15. AK. I blame it on the people responsible for privatization. CEC was Power Division of ZCCM. CEC or Power Division belonged to the Government and ZESCO belonged to government and would have become part of ZESCO without any exchange of money. The privatization people were greedy and decided to make more money by selling Power Division separately.

  16. Its not about politics but taking a view of what could happen It’s about the nature of the Supplies and need for continued supplies Directly without being curtailed by a 3 party either in contracts of differences or network and settlements
    Any intensive power and energy market consumer like the Zambian mine must be supplied by a company that has met the security of Supply requirements in those long-term bulk supply agreements and connections , and never just be a brokerage type or on paper to avoid disaster and issues of “deemed supply” and other “congestion “ restrictions for those contracted energy power and capacity because the party that has generation and supply capacity has…

  17. has to be given the access and right to supply the energy for mines to avoid futures any effects and other contagion effects and economic implications that are seen now but will also come with this and similar CEC and Zesco standoffs. It’s important to take a long-term perspective and view of those Transmission and Bulk supply arrangements A company with installed capacity and well positioned to supply and assure the mines the security of supply for long-term should be given the opportunity to Directly supply the mines and in this case that company is Zesco for now because it has Invested in the security of supply and self-generation to Supply to supply the mines long-term…

  18. There is need also for the country to continue to refocus and continue its programme of Distributed Energy, Developments of small hydro’s and self-generation initiatives ,to continue with efficient and effective Regulatory and market initiatives to support open markets access for IPPs and Power Trading with a view to sell and make available that power in an integrated power system resourcing manner that with Zesco being National Control and Balancing Authority to ensure maximum capacity and utilization of the Zambian national grid and reduce the costs of Electricity delivered to Citizens
    Zesco should be allowed to supply the mines

    So reading through the comments there is need to see…

  19. long term and see without the other party or some mining houses what the energy investments and installed capacity in those embedded revenues supporting and to create further capacity and reevaluate the installed capacity towards those energy demands by the mines given the assets and revenues accrued for re investments into further capacity

    For now thats the decision and way forward and see you April 2020 anything else is politicking and
    short-termism

  20. Yes there cold still by TSO and Discos in a typical open market to supply the Systems operator in this Case Zesco For this one the decison shoud be based purely on security of supply and secondary the tariff structure around The one with security of supply supply must supply the mines control those switch gears and areas and charge and procure access in case of conflicted lines It can only be one and never 2 unless they agreed to supply one has to disconnect and the other connect in case if they managed to import but its not possible to import looking at those SAPP matambo Grid or from EDM for long-term continuous supply to the mines Zesco should also refocus and…

  21. and look beyond CEC similar because Namibia and Botswana including south Africa power markets will in future achieve positive reserve margins from imports from the DRC cost reflective and cheaper making any sell to either noncompetitive so Its projected that the supplies from DRC will make power available and cheaper for these here mines if they were allowed to source independently also if imported around to Zambia from DRC adding the cost of wheeling surprisingly so , because that is the thinking of those miners there from alternatively to Self Generation and create own lines So if they made that possible this side to CEC to these mines it means Zesco is out and will…

  22. Yes its also the strategic thinking for CEC to build interconnections into Congo and source cheaply for the mines separately and away from Zesco without Investing in the likes of Kafue Gorge locally here for our development of the installed capacity business Now for the Countries IRPs and Energy security that may not be nationalist and wise That is why we support the Vertical inter-grated system from Generation to Transmission and Distribution with a regional national control center Going Open Market doesn’t mean neglecting building resilient and reliable national energy sector and can not be simply wheeled all the time Capacity has to be shown to be created and sourced…

  23. internationally and locally In-fact the local energy regulator must have set some emergency minimum reserve capacity of more than or less 300 Mw or so for any such Transmission and distributions companies for those licences They must have it firmly even when climate is showing

    See 2020 April

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