MAKE PUBLIC THE ZESCO/CEC AGREEMENT
By Amb. Emmanuel Mwamba
In 2018, a wholly owned subsidiary of CDC Group PLC, the UK’s development finance institution, formed a company called; Zambian Transmission LLP.
The purpose of the new company was to make a binding offer to purchase all the ordinary shares in the share capital of CEC for a cash offer price of $450million ( US$0.2338 per share).
The purchase offer was based on the anticipation that ZESCO would renew and extend the Bulk Supplier Agreement to CEC to 25 years and at similar favourable terms as the current Agreement scheduled to expire in 2020.
When ZESCO expressed concerns that the earlier agreement was exploitative and a revision needed to be done to both the period and tarrif rates, CDC pulled out of the deal to buy CEC.
NEW BULK SUPPLIER AGREEMENT
On Wednesday, both ZESCO and Copperbelt Energy Corporation Plc jointly announced they had reached an agreement for the bulk supply of electricity.
Recognizing that ZESCO is incurring costs of up-to $40million a month in current Power Purchase Agreements from Independent Power Producers, it is imperative that the details of the Bulk Supplier Agreement entered into, are made public.
1. What’s the duration of this Agreement? 5 years? 10years? 25 years? 50 years?
2. What tarrif charges or rates will ZESCO charge CEC? How much will CEC pay ZESCO per Kilo Watt, at peak and during normal or standard schedules.
3. What period is given to CEC when it falls into arreas? What are the details of the termination clauses?
4. In making a bulk supply of electricity available to the distribution system of CEC, will these assets be maintained by CEC or ZESCO and who meets some of the irrecoverable cost?
It is imperative that we ask these questions as it is common knowledge that CDC Group has been hanging in the shadows since 2018, waiting for this Agreement to snap up one of the most profitable African companies.
The value of CEC should never be based on an exploitative and unfair business relationship with ZESCO.
ZESCO is our public company, formed for the development and benefit of the people of Zambia.