Stable power supply impresses businesses

04 Feb, 2024 - 00:02 0 Views
Stable power supply impresses businesses

The Sunday Mail

Business Reporter

BUSINESS has commended the improved power supply situation the country is experiencing, saying the trajectory should be sustained into the future to stimulate productivity across all economic sectors.

In the past, Zimbabwe has been experiencing constrained power generation largely due to obsolete equipment that has been consistently breaking down at Hwange, the country’s biggest thermal power plant, and low dam levels at the Kariba Hydropower Station.

Despite constrained output from Zimbabwe’s largest hydropower plant, Kariba, due to low water levels occasioned by climate change, the commissioning of Hwange Thermal Power Station’s Units 7 and 8 by President Mnangagwa last year added 600 megawatts (MW) to the national grid.

So far, the country’s power generation averages 1 400MW, including output from projects by independent power producers (IPPs), some of which are feeding into the national grid. This is against national demand of above 2 000MW.

The Government intends to increase Zimbabwe’s overall electricity supply from 2 317MW of installed capacity to 3 467MW by next year.

In an interview, Zimbabwe National Chamber of Commerce chief executive officer Mr Christopher Mugaga said while the prevailing electricity supply situation is commendable, the authorities should ensure the momentum is sustained going forward.

“Power is like water. It’s a utility and with a utility, the benefits can be measured when there is consistency over a minimum of two months. You can’t really see the benefits of power improving over two days or a week.

“The power improvement that we are witnessing is just recent and it gives us hope if this trend is consistent over a period of not less than 60 days so that we can then measure its impact on job creation and sustainability on productivity.

“Obviously, when there is power, it means there is life in business because power is the engine of the manufacturing sector.

“Where there is no power, there is no business. If it increases, we then expect a number of factors to be on our side, be it the GDP (gross domestic product) headline growth, production itself, the potential for exports, and the cost of doing business will be manageable,” he said.

Upgraded at a cost of US$1,5 billion, Units 7 and 8 have become a game changer in Zimbabwe’s energy generation profile, whose achievements fulfil one of the assurances made by President Mnangagwa — to improve electricity supply in line with the key aspirations of the National Development Strategy 1 (NDS1).

NDS1 is the Government’s five-year economic development programme running between 2021 and 2025 after which it would be replaced by a similar policy, NDS2, to lead the country to the envisaged upper middle-income society by 2030.

“Once power is granted, it means we can plan and we continue engaging. Last week, we had a private meeting with the President (Mnangagwa) himself and we spoke on a number of issues, including power supply,” said Mr Mugaga.

Complimenting the Government’s efforts, Mr Mugaga said: “As the private sector, it is our belief that we should play a role in power generation because Independent Power Producers’ projects need to be implemented and complement the work the Government is doing to improve electricity generation in the country.”

The improvements in electricity supply and continued investments are expected to help in raising capacity utilisation in the manufacturing sector to 60 percent this year.

In 2022, capacity utilisation in the manufacturing sector stood at 56,1 percent and statistics for last year are yet to be released by the Confederation of Zimbabwe Industries (CZI) as the industrial lobby group is still working on the manufacturing sector survey report.

In a separate interview, CZI president Mr Kurai Matsheza said sustained power supply improvement is what industry requires to guarantee better production in the local manufacturing sector.

“If the power supply situation in the country has improved, obviously, it’s a welcome development but it’s the sustainability that we want.

“Intermittent improvement on power supply is not sustainable for industry as this regresses our operations and ultimately production is adversely affected,” he said.

Zimbabwe Miners Federation acting chief executive officer Mr Tafirenyika Chitsungo, whose organisation is the mother body of the small-scale mining industry, commended the improved power supply situation, saying if sustained, this would go a long way in reducing downtime induced by load shedding.

“Obviously, this is a good thing to have as it reduces downtime induced by intermittent power supply that the small-scale mining industry has been grappling with of late.

“It is our fervent hope and clarion call to the authorities that there is going to be consistency in power supply and impact on our production,” he said.

Meanwhile, in a recent report prepared by a brokerage firm, IH Securities, the country has started reaping savings from reduced energy imports following improved domestic electricity generation largely from the upgraded Hwange Thermal Power Station and the rising contribution by IPPs.

Consequently, IH Securities highlighted that the upgraded Hwange Power Station had a significant impact on Zimbabwe’s monthly power import bill, which was reduced by 57 percent to US$11 million by the end of the third quarter of 2023.

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