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Zambia’s power crisis intensifies

LUSAKA — Zambia’s power deficit will widen by 42% by December as low water levels at the world’s biggest dam hobble hydropower production in the country, Energy Minister Dora Siliya said.

The shortfall will increase to 1,000MW from 700MW now, she told legislators on Thursday in the capital, Lusaka. The Kariba Dam, where Africa’s second-largest copper producer generated almost half of its 2,300MW of total capacity, was running out of water, and output next year would have to be lower than in 2015 or stop altogether, Ms Siliya said.

“The power crisis is real and I think it is high time that everyone in the country understood that we are dealing with an emergency situation,” she said. “The situation is that Kariba is empty, we are at low levels.”

Low prices for the copper that accounts for more than 70% of Zambia’s exports, a ballooning budget deficit and the lack of electricity mean the economy may grow at its slowest pace in 17 years in 2015. The kwacha has lost almost half its value against the Dollar since January, making it the worst performer out of 155 currencies tracked by Bloomberg.

Kariba was 21% full last week, according to the website of the Zambezi River Authority, the regulator of the dam that both Zambia and Zimbabwe use for power generation. The water level was 478.5m above sea level, 3m higher than the minimum required for operations. Low rainfall was expected again next year, which would compound the situation, said Mr Siliya, who President Edgar Lungu appointed to head the newly created energy ministry in October.

Floating plant

The authority had cut each country’s water allocation for next year to 10-billion cubic meters, she said. That was a reduction from the initial 45-billion cubic meters for this year that was later cut to 33-billion cubic meters. Below-normal rainfall had caused the water level to drop, said Ms Siliya, who disputed claims that Zambia had worsened the situation by overusing its power plant at Kariba.

To mitigate the electricity shortage, Zambia was spending $14.3m each month to import 148MW from a private producer and had contracted a 200MW floating plant from Karpowership to dock off neighbouring Mozambique’s coast, she said.

A 300MW coal-fired plant in the south of the country would be commissioned in June, said Ms Siliya. A new hydropower plant at Lake Itezhi Tezhi would add 120MW by January, she said. The government was also seeking 200MW of emergency power from large diesel generators in the country by next year.

These measures are adding to strain on government’s finances already pressured by a budget deficit that’s forecast to almost double from levels the administration projected for this year. Copper prices near six-year lows are not helping Zambia’s finances either. Altogether, the interventions the government was taking to mitigate the crisis would cost about $1bn over the next two years, Ms Siliya said.

‘Sleepless nights’

“We have a huge revenue gap,” she said. “I’m sure the minister of finance is having sleepless nights.”

The kwacha was little changed at 12.5061 to the dollar at 7:18 a.m. in Lusaka, having weakened 49% this year.

Mining companies could not continue to buy power at subsidised prices because this was not sustainable, Ms said Siliya. The government needed to find a “middle ground” in pricing for the industry that consumed about half of the country’s total power, she said.

Zesco, the state-owned power producer, has applied to more than double prices for customers — except for mines — and the regulator will make a decision in November.


Source – BDLive