ZESCO revenue for 2023 hits $1.1 billion
If you thought Zambia has no locally owned billion dollar businesses, well think again. Zambia’s state owned power utility ZESCO has posted revenues in excess of $1 billion (K28.23 billion) in 2023, surpassing the initial budget of K21 billion that had been set.
According to the regulator, the Energy Regulation Board – ERB, ZESCO was able to surpass its budgeted revenue but was adversely affected by the exchange rate for its power purchase agreements whose payment terms are denominated in dollars.
Analysts say, it’s these dollar contracts that are also contributing to the public utility to shockingly opt to load shed local clients who pay in Kwacha, in preference for continued exports which are pegged in US dollars.
The revenue revelation by ERB however is silent on the cost and administration expenditure structure of the utility which remains the biggest challenge. ZESCO continues to be used by successive governments, including the current new dawn administration as an employment agent for cronies, relatives and their family connections, a vicious circle that leads to incompetent management and operations.
Today, local businesses and households in Zambia are being subjected to about half a day of load shedding (though the official time of power cuts is reported to be 8 hours) due to mostly the actions of an incompetent board and management appointed on political and nepotism considerations.
The utility however boasts of having some of the best engineers and professionals in their employ but lack of a merit based systems for promotion and reward has left many of these talented Zambians frustrated and disillusioned.
ZESCO has been dilly dallying on instituting the force majeure clause to halt exports to meet local requirements. In a double standard move, the power utility has instead proceeded to serve its local clients letters invoking the force majeure clause to justify their inability to supply power as per contractual agreements.
With revenues of $1.1 billion, a regulatory environment that favours ZESCO and a history of a monopoly that has seen the utility own the largest electricity generation and distribution infrastructure, with adequate regional power transmission inter-connectors, one wonders how the utility can fail to supply power to the local market.
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Photo below is ZESCO board Chairperson Vickson Ncube who had been expected to deliver credible corporate governance but seems to be having deep challenges