Zambia Weighs Emergency Power Price Hike as Crunch Deepens

(Bloomberg) -- Zambia’s energy regulator is considering an application from the state-owned power utility to increase electricity tariffs by as much as 156% as an emergency measure to cover drought-induced losses.

The price rise will help Zesco Ltd., as the utility is known, to raise $14 million from retail electricity users, the Energy Regulation Board said in in a statement published on its website Aug. 16. 

Zambia’s electricity shortage has rapidly worsened as an El Nino-induced drought caused water levels to plunge at the hydropower dams it relies on for about 85% of generation. At Kariba, the biggest, the nation is set to deplete its water allocation by the end of September, according to Zesco. 

The emergency tariff increase threatens to further fan inflation already running at 15.4% in July. Copper mines in Zambia, Africa’s second-biggest producer of the metal, have resorted to trying to secure imported power to cushion the blow of the shortage. 

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