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EDM Claims Public Lighting Loses $20M a Year

EDM Claims Public Lighting Loses $20M a Year

Mozambique’s publicly-owned electricity company, EDM, claims that it is losing 20 million dollars a year as a result of public lighting, for which it receives no subsidy.

The cost of providing street lighting in cities and towns, whether in municipalities or not, is borne directly by EDM.

Domestic electricity consumption has risen by 50 per cent over the last three years and now stands at 1,080 megawatts (MW) at peak times, according to EDM Commercial Director, Belmiro Oscar.

Interviewed by AIM, he said that, in the past EDM used to supply 500 MW at peak time, a demand that was met by the energy supplied by Hidroelectrica de Cahora Bassa (HCB), the company that operates the Cahora Bassa dam on the Zambezi River

But today the peak is 1,080 MW, which cannot be met by HCB. The deficit is covered by EDM purchasing power from private suppliers at extremely high prices, a situation that is forcing the company to make a cost containment plan.

“The subsidized energy from HCB is half the peak we have today, and the other half we have to get from private suppliers and it has a different cost. In the cost structure, we need to see where we can implement containment and guarantee the sustainability of the company and the fulfillment of the universal electrification agenda by 2030”, he said.

He said the company needs to find a suitable model to make the energy business sustainable.

“The business model will become sustainable whenever we apply the right management. We can’t run away, that’s the agenda, we have to electrify the country”, he said.

According to Óscar, in order to overcome the situation, a forum that includes the Ministry of Mineral Resources and Energy (MIREME), EDM and the Energy Regulatory Authority (ARENE), has been set up to find a way to meet the costs of public lighting.

This lighting includes traffic lights in Mozambique’s main cities. Out of the total of 65 municipalities, only 20 have traffic lights, of which only 15 have honored their commitments to EDM, four are still struggling to pay for the power, and one, Chiure in the northern province of Cabo Delgado, has a traffic light system running on solar panels.

As a result of high costs, EDM was forced to cut off the power supply for the traffic lights in Quelimane, in the central province of Zambézia, one of the municipalities run by the main opposition party, Renamo. It installed a pre-paid energy system (Credelec) for the lights.

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Despite the challenges, Oscar said, EDM is ready to supply electricity but it must focus on sustainability of the business.



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