Energy Expert Leonard Sepe has cautioned power utility, Zesco to fulfill its contractual obligations with independent power producers to avoid a repeat of the financial crisis it faced due to delayed payments between 2022 and 2023.
While acknowledging the hope for Zesco to meet its obligations under the newly signed power purchase agreements, Mr. Sepe notes that several factors will determine its success including improving financial stability, government support, strong contractual agreements, regulatory oversight, and learning from past challenges.
According to the latest Auditor General’s Report, Zesco incurred significant interest charges, totaling over $70 million in 2022 and more than $85 million in 2023, due to late payments to independent power producers.
Mr. Sepe has warned that delayed payments and accruing financial interests have far-reaching consequences, particularly affecting ordinary citizens.
His comment come after Zesco signed power purchase agreements worth over 332 megawatts of new solar capacity with various developers with the construction of these projects expected to begin within the next two months, while commissioning is anticipated before the end of the year.
Meanwhile, Energy Expert Johnstone Chikwanda says there is need to strengthen the quality of power purchase agreements to ensure the energy sector does not end up with multiple power purchase agreements which cannot attract funding and sector development.
Commenting on Zesco’s signing of multiple power purchase agreements with micro generators and power developers under the presidential solar initiative which will add a combined total of at least 320 megawatts of clean energy, Dr. Chikwanda notes that while this is a good initiative, the crisis will only be sustainably eradicated by significantly launching other sources of energy.
Credit : PHOENIX NEWS