Mera announces 10% hike in electricity tariffs

The Malawi Energy Regulatory Authority (Mera) has increased electricity tariff by 10.6 percent effective 30 March 2021, arguing that the upward adjustment was long overdue.

This means that electricity tariff has been adjusted from K94.43 to K104.46 kilowat per hour.

Mera Consumers Affairs and Public Relations Officer Fitina Khonje told journalists that the decision to hike electricity tariff was made during the electricity tariff review meeting held last month.

Khonje also said apart the depreciation of the Malawi Kwacha against major foreign currencies; Mera approved the adjustment to allow ESCOM to carry out its functions effectively.

“The adjustment of the electricity tariff comes about because of two main issues. The first one is that out review of the electricity tariff using the automatic tariff adjustment formula necessitated that the tariff be adjusted upwards by 5.72 percent.

“The formula is applied every month and the aim is to reinstate or restore the value of the tariff that was already agreed on. The second factor is on the based tariff that was agreed to run from 2018 to 2022 and we started implementing in 2018. In 2020, the review showed there should have been an adjustment of tariff based on the based tariff trench,” she explained.

She further argued that at the time, ESCOM was supposed to get 7 percent, but based on its performance it was agreed they only qualified for 1.65 percent.

In the same month, using the formula, ESCOM was supposed to get by 5 percent, but that was not implemented because of other players who came into the market.

“Our concern that time was to first of all address the requirements of the players, assess and see to what extent they impact on the tariff. Unfortunately they have not exerted that much force on the tariff. So, having reviewed the tariff, Mera approved the upward adjustment,” said Khonje.

The last time the electricity tariff was increased was in 2018 by 31.8 percent and was planned to be implemented in tranches from 2018 to 2022.