The Malawi Energy Regulatory Authority (Mera) has approved a 50.8 percent electricity tariff hike.
This was disclosed today at a press briefing in Lilongwe.
Mera chief executive officer Henry Kachaje said the Mera board recommended the tariff hike at a meeting held on August 29, 2023, after reviewing a Power Market Limited proposal of a 99.9 percent increment and later a base tariff application of 69.7 percent by the Electricity Supply Corporation of Malawi (Escom).
“Following review of base tariff application by escom in April, Mera met Escom and the Electricity Generation Company (Egenco), and conducted public hearings in Blantyre, Lilongwe and Mzuzu. Escom justified its application and base tariff application,” said Kachaje.
According to Kachaje, to minimize the tariff burden on customers, MERA resolved that the above average tariff of K157.50/kWh be split and segmented into annual tranches.
In 2023/24, tariff will be hiked by 18 percent while in 2024/25 it will be by 16 percent. In 2025/26 tariff will increase by 12 percent while im 2026/27 9 percent.
“The first tranche of 18 percent adjustment that will move the tariff from K104.46 to K123.26 per kWh will be implemented with effective today 1st September 2023. The Authority believes that granting this tariff adjustment, will enable the power sector to realize enough revenues for investments, system maintenance, operations, and other appropriate costs, thereby improve and sustain provision of services to customers,” said Kachaje.
To ensure accountability and effective implementation of the 2023-2027 base tarrif, Kachaje said Mwra will intensify monitoring of Escom’s performance based on the agreed key performance indicators (KPIs).
“The KPIs consist of the newly formulated ones as well as the existing ones which have been used in the previous base tariffs. The KPIs focus on technical as
well as financial/economic aspects and have further been attached to individual licensees within Escom and separate ones for Egenco.
“Performance on the KPIs on quality of service to be achieved in the new base tariff period, shall form part of licensing conditions for the utility. Non-compliance on these KPI targets will attract penalties under the electricity base tariff,” explained Kachaje.
