ZERA Posts 126% Revenue Growth in 2024

…but faces cost control challenges

HARARE – THE Zimbabwe Energy Regulatory Authority (ZERA) achieved significant progress in its 2024 regulatory mandate, with inflation-adjusted Key Performance Indicators and sectoral performance showing improvement over 2023, though some challenges remain.

Financial Performance

ZERA’s inflation-adjusted income increased significantly from ZWG199 million in 2023 to ZWG450 million in 2024 — a 126% growth. Operational expenses similarly rose by 164%, from ZWG115 million to ZWG303 million.

While the income growth is impressive, the sharper increase in expenses raises concerns over cost containment and operational efficiency. Nonetheless, the net surplus of ZWG27 million, earmarked for the Rural Electrification Fund, reflects prudent financial stewardship.

The Authority’s net worth jumped to ZWG400 million from just ZWG45 million in 2023, suggesting robust asset accumulation and potentially improved financial resilience. However, sustainability of this growth trajectory will depend on managing capital and operational expenditures effectively.

Electricity Sub-Sector

Electricity supply rose by 9.7%, from 10,096 GWh in 2023 to 11,082 GWh in 2024, reflecting improved generation capacity, partly due to increased participation by Independent Power Producers (IPPs). IPP contribution rose by 16%, from 391 GWh to 453.7 GWh, signifying progress in diversifying the energy mix.

Seventeen new generation licenses (total capacity 786.08 MW) and three retail supply licenses were issued in 2024. These developments highlight ZERA’s active role in attracting investment into the electricity sector. However, the average supply of 1,300 MW still lags behind the national demand of 1,700 MW, with persistent underperformance at major hydro sources like Kariba due to low water levels — an issue tied to climate change and infrastructure age.

Despite the improved generation numbers, affordability remains stagnant as tariffs were unchanged at USc16.08/kWh throughout the year. While this may protect consumers, it may also undermine utility viability, especially given ZETDC’s high technical and commercial losses.

Petroleum and LPG Sub-Sector

Fuel imports slightly increased from 1.73 billion litres in 2023 to 1.79 billion litres in 2024. The number of licensed petroleum retail operators grew by 3% from 936 in 2023 to 996 2024, reflecting expanding market participation. The compliance rate among fuel retail sites improved significantly to 93.4% from 85%, signaling effective enforcement by ZERA.

LPG imports surged by 17% from 66 million kg in 2023 to 77 million kg in 2024, indicating growing household and industrial adoption. However, the increase in LPG-related accidents highlights a critical safety gap. While ZERA continued with training initiatives and enforced bans on smuggled cylinders, more proactive public awareness and regulatory tightening are required to reduce mishandling risks.

Organisational and Governance Performance

The 2024 organisational performance index stood at 4.515 out of 6 (75.25%), showing strong internal delivery. The Authority adopted a new organisational structure to improve efficiency, and an employee engagement score of 70.09% (up from 61% in 2023) reflects improved internal morale.

However, gender equity remains a concern. Although the overall staff gender split is reasonably balanced (46% female), the underrepresentation of women in senior roles and the board’s non-compliance with the statutory requirement of four female members (currently only two) highlights the need for deliberate gender mainstreaming policies.

Regulatory Integrity and Risks

ZERA’s internal audit team achieved 88% completion of its audit plan and took a proactive role in regulatory advisory functions, including the early adoption of global internal audit standards. A longstanding regulatory gap concerning aviation fuel was finally addressed via Statutory Instrument 109 of 2024.

Nevertheless, ZERA reported a 75% loss ratio on insurance, significantly above industry norms (43-45%), mainly due to motor vehicle claims. This exposes weaknesses in risk profiling and suggests the need for improved insurance structuring and asset protection policies.

Stakeholder Engagement and Consumer Advocacy

Consumer complaints rose from 59 in 2023 to 92 in 2024, with a resolution rate of 88%. Of concern is that 33% of the complaints were linked to fuel adulteration, suggesting gaps in monitoring and enforcement despite increased inspections.

ZERA’s consumer education and public outreach efforts remain critical, but the growing trend in quality violations — especially in fuels and substandard solar equipment — indicates the need for stricter entry barriers and increased product verification, including faster implementation of the planned Solar Product Registration System.

Our thoughts

ZERA’s 2024 performance reflects a regulator that is expanding its reach, strengthening internal systems, and aligning with national goals of energy access and sustainability. However, some weaknesses — rising operating costs, infrastructure constraints, fuel quality lapses and gender imbalance in governance — pose risks to long-term credibility and impact. ZERA’s regulatory capacity is growing, but maintaining public trust and sectoral stability will depend on closing operational and systemic gaps while enhancing strategic agility.