ECONOMIC REGULATION - Power Sector Reforms
For historical reasons, most electricity infrastructure
across the world has been State-owned, having been considered of strategic
nature for development. Over the past decades, however, most countries have
embarked on reforms to ensure
increased investment and efficiency in
the provision of electricity services. The key drivers for power sector reforms
in Africa and other parts of the world have
Inefficiencies in investment
and operations (poor governance, few incentives for cost reduction,
deterioration or collapse of services, etc)
Insufficient public financing for
Part of overall economic restructuring (macro-economic
Technological innovation (changing economies of scale and scope, new
possibilities for competition.
Slow pace of investments in the power sector and resultant low levels
of access to power.
The electricity industry in Zambia has been undergoing restructuring
since 1994. The main thrust of the reforms has been to liberalise and promote
private investment in the industry, particularly in the area of generation. The
amendment of the electricity ACT in 1995 abolished the statutory monopoly of
ZESCO while the Energy Regulation Act of the same year established the ERB as an
independent regulator of the energy sector.
Currently, government's power sector reform strategy has focussed on
the Commercialisation of ZESCO, opening up to private investment and
establishment of an independent regulator. The ERB and the Government continue
to explore further means to promote investment and remove existing impediments
to power sector investment in Zambia.