Zambia denies expropriation

Zesco supplies power to Konkola Copper Mines after CEC refuses

04 June 2020 | Energy

“It is their property and we have no intention of taking it over.” – Matthew Nkhuwa, Zambian energy minister

Zambia's government said on Wednesday it had no intention of taking over Copperbelt Energy Corp (CEC), after the company accused the government of expropriating its power lines by saying others must be allowed to use them if they paid.

Zambian energy minister Matthew Nkhuwa issued a statement, known as a statutory instrument, on Friday declaring the CEC power lines a “common carrier” and obliging it to transmit electricity on behalf of other players on agreed terms and conditions. CEC, formerly a state-owned firm before it was privatised in the 1990s, said the statutory instrument and other steps taken by the government amounted to expropriation.

Zambia's Energy Regulation Board (ERB) wrote to CEC on 31 May to establish a new charging arrangement, known as a wheeling tariff, equivalent to about 30% of the current tariff for using the firm's network, the company said.

CEC said the government's actions had taken away the company's commercial and property rights and had prevented it from taking viable business decisions.

The energy minister said the infrastructure remained CEC property but others could use it on agreed terms and conditions. “It is their property and we have no intention of taking it over,” Nkhuwa told Reuters.

“They will charge but their charges will have to be in line with the Southern African Power Pool and ERB regulations.”

CEC said on Sunday it would stop supplying power to Vedanta's Konkola Copper Mines (KCM) unit after talks to extend a supply agreement broke down over debt owed to CEC.

However, the government intervened and said KCM would now receive its power directly from state-owned utility Zesco, which previously sold electricity to CEC for onward supply to KCM. Nkhuwa said the bulk electricity supply agreement between Zesco and CEC, which expired on 31 March, would not be renewed.

– NAMPA / REUTERS

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