Economy

The ZESCO – CEC Impasse May Erode Investor Confidence In The Energy Sector – Mutati

Former Minister of Finance Felix Mutati has cautioned that the impasse between ZESCO and the Coperbelt Energy Corporation arising from the power sharing agreement may erode investor confidence in Zambia.

Mr. Mutati said the impasse if left unchecked is likely to threaten the security of power supply and may erode the broader investor confidence in the energy sector as well as create anxiety in the mining sector where the larger share of customers is.

Mr. Mutati said the impasse will not only hurt ZESCO’s revenue but compromise the power utility company’s ability to raise financing that is critical for its operations in the future.

“Realism must be put ahead of emotions. The impasse will not only hurt the revenue of ZESCO, but it will compromise their ability to be able to raise financing that are critical for their operation going forward,” Mr. Mutati said.

He said this impasse between ZESCO and CEC is also a danger as some people may suffer job losses and if this uncertainty is left unchecked, it will be at a cost of the economy.

“The danger that this has is that we may suffer job losses, it may threaten the security of power supply but also we may be vulnerable to eroding the broader investor confidence, not only in the energy sector but overall,” he said.

Meanwhile, Mr. Mutati said there is need to expedite the completion of the cost of service study. He said this cost of service study must be able to define the margins that the players in the energy sector must be able to make as profit, anchored on the security of supply.

“Going forward; I suggest to the Minister of Energy to put in a new interim power supply agreement as we resolve the impasse. We need to complete the cost of service study in the interim that will be able to define the margins that the players in the sector must be able to harvest,” Mr. Mutati said.

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2 Comments

  1. Nyendwa

    This is true because many people’s lives will be ruined if not checked
    Mr Mutati has a point.

  2. viper

    THIS IS SERIOUS

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