Association of Power Companies in Zambia President Silvester Habajene says continued engagement between government and the private sector is critical to resolving policy bottlenecks and unlocking investment needed to expand electricity generation in the country.
The media reports that speaking on the sidelines of the Public Private Dialogue Forum meeting held in Lusaka today, Mr Habajene said the meeting reviewed progress on a number of long standing issues affecting the energy sector.
Mr Habajene, who also served as Co-Chairperson of the meeting, explained that the Forum allowed both government and industry players to assess concerns previously raised and track progress on matters that have already been resolved.
“We reviewed progress on issues that sector players raised in the past and noted where progress has been made,” he said.
He added that the meeting also brought forward new concerns from industry players and described the government’s response to the issues raised as encouraging, saying stakeholders appreciated the constructive engagement.
Mr Habajene particularly commended the Zambia Revenue Authority for providing clarification on tax related matters affecting investments in electricity generation, transmission and distribution.
He explained that investors bringing equipment into the country for power projects are allowed to import such equipment duty-free, a measure aimed at lowering the cost of developing electricity infrastructure.
“This will ultimately help make electricity more affordable,” he said.
Mr Habajene noted that reducing taxes on critical equipment will ultimately help lower the cost of electricity production and make power more affordable for consumers.
However, he acknowledged that some tax issues remain complex and will require further consultations between the industry and government institutions to reach lasting solutions.
Mr Habajene added that stakeholders have raised operational challenges affecting fuel transporters, including concerns about double charges when transporting fuel into Zambia from Tanzania, where transporters reportedly pay a fee at the border and another at a toll plaza about 20 kilometers inside the country.
Mr Habajene said the matter will be addressed through further discussions involving the National Road Fund Agency, the Zambia Revenue Authority and industry players.
Meanwhile, Western Power Company Managing Director Thomas Younger said policy clarity remains critical for attracting financing to large scale electricity projects.
Mr Younger mentioned that investors and lenders require certainty in laws and taxation before committing funds.
“Lenders need absolute clarity on the tax regime and legal requirements before they can release financing,” he said.
Mr Younger explained that developers must reach what financiers call “financial close” before construction can begin, a stage that requires complete clarity on the legal and tax framework governing a project.
He added that industry players are currently engaging the Zambia Revenue Authority, the Ministry of Finance and National Planning, the Ministry of Commerce, Trade and Industry, the Energy Regulation Board and the Zambia Development Agency to clarify areas where policies appear to conflict.
