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Tariffs and Subsidies in Zimbabwe’s Reforming Electricity Industry: Steering a Utility through Turbulent Times

Engineer S.E. Mangwengwende

Chief Executive

Zimbabwe Electricity Supply Authority


Abstract

In 1991, the Government of Zimbabwe adopted a public enterprise reform strategy as part of a World Bank driven Economic Structural Adjustment Programme (ESAP). For the electricity sector, the Government adopted a two-pronged programme of reform – a performance improvement programme (PIP) for the national utility, the Zimbabwe Electricity Supply Authority (ZESA), and a legal and regulatory reform programme for the electricity sector in general. Ten years later, significant success has been achieved in improving the utility’s performance in technical operations and customer service. However, there has been very little progress on the legal and regulatory front. This has adversely affected the utility’s financial performance, as well as frustrating the Government’s efforts in attracting private sector investment. The centrality of the tariff question reflects the importance of the customer or end-user to the power sector reform process. This article outlines the power sector reform experiences in Zimbabwe with special focus on the tariff question. The paper suggests, from the perspective of a utility executive, reasons for the mixed results at ZESA, and lessons for other countries in the region undertaking similar reforms.


Keywords :    Eelectricity tariffs, PSR, Zimbabwe

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