REVIEW OF ESCOM ELECTRICITY TARIFFS
The Malawi Energy Regulatory Authority (MERA) undertakes monthly reviews of ESCOM’s electricity tariffs through the Automatic Tariff Adjustment Formular (ATAF) to assess the impact of economic fundamentals of the exchange rate and Consumer Price Index (CPI) on ESCOM and other licensees’ business.
In August 2023, the Authority approved and granted ESCOM a 50.8% base tariff increase for the period 2023 to 2027. The first-year tranche of 18% which became effective on 1 September 2023 moved the average tariff from K104.46/kWh to K123.26/kWh.
At the time of this tariff increase, the exchange rate was at MK1,126.77/US$ while the consumer price index (CPI) was at 141.6. Since then, the exchange rate has moved to K1,700.00/US$ as announced by the Reserve Bank of Malawi on 8 November 2023, while the CPI has increased to 146.4 as noted in September 2023.
Applying these economic fundamentals to the automatic tariff adjustment formula (ATAF) results into a 40.92% tariff increase.
Based on ATAF principles, tariffs are adjusted when the outcome is beyond ±5% trigger threshold. In view of the above ATAF outcome, the average electricity tariffs have been adjusted from the current K123.26/kWh to K173.70/kWh effective 10 November 2023
9 November 2023