First Quantum Minerals (FQM) says the recently proposed Electricity and Energy Regulation Bill is welcome but the powers given to the Energy Regulation Board (ERB) will discourage investment in the sector.
FQM Head of Government Affairs John Gladston said some provisions in the bill give authority to ERB to withdraw power generation licences and adjust tariffs despite a bulk industrial user having entered into a contractual agreement.
Mr Gladston said lack of security in terms of validity and duration of licences issued by ERB will discourage investors from pumping in money into the energy sector, especially those who rely on concessional funders.
“These funders need long term assurance and stability on tariffs over decades. It is this security of contractual arrangements that has attracted so many large solar investments in other jurisdictions like South America and Australia.
“With the required regulatory reform, there is no reason why Zambia should emulate this success. The bills are problematic because ERB is awarded the authority to revoke licences in ‘public interest’ or in ‘emergency’,” he said.
Mr Gladston said this when FQM appeared before a parliamentary sub- committee on energy, water development and tourism chaired by Mbabala Member of Parliament Ephraim Belemu recently.
He, however said the definition of public interest or an emergency is not provided for and this ambiguity in the proposed legislation will turn investors away.
Mr Gladston said investors need protection to ensure that their licences are not unilaterally revoked or altered.
By Esther Mseteka, Zambia Daily Mail