ZIMBABWE National Chamber of Commerce (ZNCC) president Mike Kamungeremu has urged power authorities to preannounce and stick to the load-shedding schedules as sporadic power cuts are negatively affecting the ease of doing business nationally.
This comes as power cuts, a result of attempts to conserve electricity, are often sporadic leading to reduced daily business operating hours.
In its 2023 ZNCC Annual State of the Industry and Commerce Survey released last Thursday in Harare, the business community cited power outages as the second biggest constraint to doing business.
In an interview on the sidelines of the release of the survey, Kamungeremu said businesses needed stable power supply to operate profitably as it was cheaper than using generators.
“These companies will have to wait for the electricity to be available and some of them, particularly where authorities do not then stick to the already preannounced load-shedding schedules, will have to pay workers because they turn up for work when there is a power cut and they cannot work as usual,” he said.
“Our law says workers should be paid for coming to work but there won’t be any work being done because of power cuts.”
Kamungeremu said power cuts were forcing businesspeople to resort to generators at a time when fuel prices are high.
“The cost of fuel itself, before we talk about maintenance, is expensive. You will realise that the cost of electricity right now as of the revised tariffs is about 12 (US) cents per kilowatt,” he said.
“If you are running your business on generator — we did a case study and the cost jumps to between 34 (US) cents and 42 cents per kilowatt depending on the circumstances that’s nearly four times in terms of the cost. So, we really need stable grid power because at the end of the day that is the cheapest form of power than the alternatives.”
Some companies were not relying on generators because the cost of using them eats into the revenue, Kamungeremu said.
“The other thing is that there are certain types of industries that cannot even run on generators because their machines are too big and the kind of infrastructure that they need, in terms of the ability to power those machines using generators, the cost versus what you then get when you sell the product, is a big mismatch,” he said.
Presenting the survey report, independent consultant Albert Makochekanwa said the delay in the licensing of independent power producers (IPPs) by Zimbabwe Energy Regulatory Authority (Zera) and the lengthy approval processes were discouraging investors to contribute to the national grid.
“We also found out issues that are affecting the uptake of IPPs. There are delays in the licensing of IPPs by Zera. The process could take up to three years to complete,” he said.
“Two to four years are lost in the project preparation phase. Moreover, sometimes Zera officials only recognise certification from specific experts or companies and there is no guarantee that such certification will be the last and the uncertainty discourages investors.”
Moreover, IPPs which would have borrowed in foreign currency are suffering exchange losses hampering their ability to repay loans which have a 10-year repayment period on average due to local currency volatility.
Currently, the country has a demand of 1 800 megawatts (MW) to 2 200MW of power, but is only generating between 1 100MW to 1 600MW on average.
This is owing to low water levels at the country Kariba South Hydro Power Station and machinery breakdowns at the Hwange Thermal Station.