Donors have called on Electricity Supply Corporation of Malawi (ESCOM) to proceed with its plans to hike electricity tariffs by 60 percent, arguing Malawians are paying very little for electricity.
The donors, Millennium Challenge Account Malawi (MCA-M) and World Bank, claim that Malawians should be paying three times (K155 per kwh) more than current tariff of K49.
MCA-M and World Bank issued the claims during a public hearing on the review of the 2018-2022 Escom base tariff application that were presided over in Lilongwe.
These donors further claim that the hike will attract investments into the sector and result in improving access to electricity for more people.
“The hike would be an assurance to investors that they would recover production costs. Investors want to know that there is collection discipline in Escom and they want to see signs of growth and how the sector intends to grow,” MCA-M director of power sector reforms Grace Simwaka told one of the local papers.
On its part, World Bank energy specialist Paul Kagaba said ESCOM should intensify its commercialisation efforts because the country’s energy sector can not solely rely on public funding.
“Escom would have to be counterparty to the commercial agreements and it would be crucial that Escom is able to manage its finances. Its financial condition is pertinent because if they are earning losses downstream, then the generator will have a tough time,” he said.