MORE banks should invest in the energy sector because power tariffs are now cost reflective and should generate profits in their investments, says Bankers Association of Zambia (BAZ) chief executive officer Leonard Mwanza.
Mr Mwanza said that more banks would join others such as Barclays Bank Zambia which had already started investing in the energy sector.
“Tariffs are now cost effective so we should expect a lot of interest from banks to either be take up the lead for financing,
“I would say one of our members, Barclays Bank is arranging funds for Maamba Collieries and this is a project that is coming on board next year,’’ he said.
He also said the current increase in electricity tariffs was a burden everyone should share for the sake of long-term effects where Zambia would potentially become an exporter of energy.
Mr Mwanza said the recent tariff increase would get rid of the huge back log that had been in the pipeline because now the tariffs were cost reflective and would entice investors in the sector.
“We should be able to get rid of the huge back log that has been in the pipeline because now tariffs are cost reflective and will entice investors in the sector,’’ she said.
He explained that besides low production in the mining sector, output in the local manufacturing has reduced by over 30 percent due to lack of investment in the energy sector.
He explained that mines would get back to their normal operating levels and increase efforts of production more once there was enough power.
“Pricing of electricity is now cost reflective so it makes business sense to invest in the energy sector, either in hydro or thermal,
Mr Mwanza said BAZ was in support of the increase in tariffs as it would balance up flows of foreign currencies into Zambia.