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  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 included:

  • Inefficiencies in investment and operations (poor governance, few incentives for cost reduction, deterioration or collapse of services, etc)

  • Insufficient public financing for capacity expansion

  • Part of overall economic restructuring (macro-economic constraints)

  • 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.

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