The government has approved a major overhaul of ZESA Holdings, paving the way for the country’s electricity utility to operate as one integrated company covering power generation, transmission and distribution.

The restructuring will do away with the separate subsidiary structures currently operating within ZESA, including the Zimbabwe Power Company (ZPC) and Zimbabwe Electricity Transmission and Distribution Company (ZETDC). Their functions will instead be brought together under one management structure.

The government expects the move to reduce layers of administration, eliminate duplicated functions and bring down the cost of running the power utility.

The reconfigured ZESA will fall under the oversight of the Mutapa Investment Fund, which manages a portfolio of State-owned commercial assets.

The changes are also expected to affect the workforce. According to a post-Cabinet briefing, employees whose positions become redundant will be dealt with through voluntary separation, retirement or retrenchment, depending on the circumstances and in line with provisions of the Labour Act.

Minister of Energy and Power Development, July Moyo, said ZESA will mobilise resources to meet the costs associated with workers affected by the exercise. He said cost-reflective tariffs had gone a long way in improving ZESA’s efficiency and viability.

“We want to assure the nation that ZESA will continue to supply electricity thanks to the cost-reflective tariffs,” Minister Moyo said, commenting on the restructuring.

The restructuring comes as ZESA continues to face the twin challenge of improving domestic power generation while meeting the cost of electricity imports during periods of shortages.

Government has maintained that cost-reflective tariffs are necessary to keep the electricity sector financially viable. The tariff framework is expected to help ZESA meet its operating costs while providing room to purchase additional electricity from regional markets when local generation is insufficient.

The Cabinet has also opened the door for more private investment in electricity generation, recognising the need for additional capital to expand Zimbabwe’s power supply.

The Zimbabwe Energy Regulatory Authority (ZERA) is expected to finalise the arrangements governing private-sector participation in the sector.

For businesses, the success of the ZESA reforms could have a direct bearing on the reliability and cost of electricity, particularly for energy-intensive industries such as mining and manufacturing.

The government’s broader objective is to create a leaner power utility that can operate more efficiently, attract investment and provide a stronger foundation for Zimbabwe’s industrial and economic growth.