REVIEW OF ESCOM TARIFFS UNDER THE AUTOMATIC TARIFF ADJUSTMENT FORMULA (ATAF)

BACKGROUND

The Malawi Energy Regulatory Authority (MERA) considered a review of the electricity tariffs for ESCOM under the Automatic Tariff Adjustment Formula (ATAF).

TRENDS IN EXCHANGE RATE AND CONSUMER PRICE INDEX (CPI)  IMPACT ON ELECTRICITY TARIFFS

MERA noted that as at March 2021, the last time electricity tariffs were revised following the implementation of the 5.72% ATAF outcome of that month, the exchange rate was at MK787.85/US$ while the CPI was at 128.6. Since then, the economic fundamentals have remained stable, with the Kwacha marginally depreciating to MK793.00/US$ as of 30^th March 2021, while the CPI remained at 128.6 as noted in November 2020.

Applying the above levels of economic fundamentals to the automatic tariff adjustment formula (ATAF), resulted into 0.33% potential upward tariff adjustment. Based on ATAF principles, the Board resolved to maintain tariffs at the current average of K104.46/kWh as the ATAF outcome is within the ±5% statutory trigger band.

SIGNED

LEONARD CHIKADYA

BOARD CHAIRPERSON

MALAWI ENERGY REGULATORY AUTHORITY

15^th April 2021