Zambia’s government will stop supplying cheap electricity to large industries as Africa’s second largest copper producer battles a costly power shortages.
The move away from subsidised electricity tariffs for large consumers will happen immediately, while state utility Zesco will source energy from private producers to plug the deficit, government spokesperson Vincent Mwale said.
Zambia’s government had used the low electricity tariffs as an incentive to encourage foreign firms to take over ownership of local mining companies, however, it now wants to raise more funds to build power plants, Mwale said.
On Wednesday Zambian power companies said the were cutting electricity supply to mining firms by 30 percent as electricity shortages intensified.
Zesco, which generates most of Zambia’s electricity, has seen its supply deficit stretch to 560 megawatts after a drought earlier in the year pushed down water levels at its hydro-electric plants.
Zambia’s largest supplier of power to mines, Copperbelt Energy Corp, is also experiencing severe shortages and has had to limit power supply to big mining firms including First Quantum Minerals, Vedanta Resources, Glencore.