Zambia’s energy sector has become one of the best destinations for private sector investments, Copperbelt Energy Corporation Plc’s (CEC) Chief Financial Officer, Mutale Mukuka, has asserted.
Sharing his views on various aspects of the business and the Zambian energy sector recently, Mukuka said the improving economic variables in the country, ongoing sector reforms and the government’s focus on dialogue with the private sector, made for an attractive investment environment.
Mukuka stated that the levels of investor comfort were also expected to be bolstered by the positive performance of other key economic indicators and the economic recovery programme supported by the International Monetary Fund (IMF).
He was particularly happy with the government’s focus on deepening dialogue with private economic actors.
“It is good the Government is prioritising dialogue with key stakeholders in growing key sectors of the economy, such as mining and energy. The Public Private Dialogue Forum is trying to see how we can identify the bottlenecks so as to facilitate for private money to come, not just in the energy sector but in the country as a whole,” Mukuka explained.
“And if you add up all of these things that are happening, such as sector reforms, you will see that this is the country you want to be in as an investor because you will be assured that you are making an investment in a stable country.”
He said in this vein, CEC fully backed the public consultations undertaken by the state following the release of the electricity Cost of Service Study report at the back end of 2022 and the subsequent government Green Paper. The consultations were intended to take on board various stakeholders’ social and economic interests prior to actioning any report findings and recommendations.
“We think highlighting stakeholders’ social and economic needs that need to be taken care of is quite key to assuring the financial health of the electricity industry as a whole to allow for the required growth, not only in the sector but in the country as a whole,” Mukuka said.
On the reform front, the government has been removing legacy obstacles to private investment into the energy sector through reforms specifically focused on encouraging the growth of electricity generation and trading.
Mukuka said it was crucial that the government was pursuing reforms that promote the private sector to thrive through the provision of a tariff that allows for the financial health of industry players and, also, takes care of stakeholders’ social and economic needs.
The enactment of the Electricity Act of 2019, which repealed the Electricity Act of 1995, became the country’s closest discernible attempt to end the single-buyer model, and to regulate the generation, transmission, distribution and supply of electricity in a manner that improves supply and encourages private sector investment.
Zambia is also positioning itself to become the regional hub for power trading, given the power deficit in Southern Africa and the expected increase in demand, especially from growth in mining activities in the mineral-rich Democratic Republic of Congo (DRC).