Government to subsidise rural electrification

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Government to subsidise rural electrification

8:16 CAT | 13 Jul 2018

File photo: Notícias

The Mozambican government has reiterated that it will bear the costs of electrification in rural areas where the project would otherwise not be financially viable.

Speaking at a seminar in Maputo on Wednesday, the chairperson of the publicly owned electricity company, EDM, explained that under the current business model losses from the social component of projects often erode the gains from the commercial element leaving an unsustainable situation.

Malaga stressed that rural electrification will continue because electricity is a mechanism for social inclusion. Therefore, the government and EDM have set a goal of providing universal access to electricity by 2030. This will involve bringing electricity to communities whose consumption would not justify the required investment in transmission lines and other equipment. In these cases, the government will step in to provide additional funding.

He revealed EDM’s clients owe the company over a billion meticais (just under 17 million US dollars at today’s exchange rate). Of this amount around sixty per cent is owed by social consumers.

The seminar discussed new procurement regulations which centralise the process for contracting services and purchasing goods, offering greater transparency and credibility.

According to Fatima Artur, EDM’s executive board member for personal and corporate services, the model presented to funders combines various international methodologies. She argued that EDM will make large savings through refining the method for contracting supplies.

Whilst EDM’s customers owe around 17 million dollars in unpaid bills, the debt owed by the Zambian electricity company (ZESCO) is considerably higher. At the end of June EDM spokesperson, Luis Amado, revealed that EDM had interrupted the supply of power to ZESCO because the debt had reached 70 million dollars.

EDM is also owed several million dollars by the Zimbabwean electricity authority (ZESA). However, ZESA has agreed to pay off this debt by supplying electricity transformers to EDM.

Source: AIM