By Wezzie Gausi:
The Electricity Supply Corporation of Malawi (Escom) is expected to lose about K11 billion within a year due to failure to increase tariffs for domestic consumers.
Escom Chief Executive Officer Kamkwamba Kumwenda said annual tariff adjustments are approved by the Malawi Energy Regulatory Authority (Mera).
However, he said last year’s adjustment spared domestic consumers.
“The consequence of this decision is that Escom is now unable to carry out necessary maintenance on its network. We have a duty to provide electricity to all, but with the current tariff, we are unable to do so,” Kumwenda said.
He added that Independent Power Producers, which sell electricity to Escom, were allowed to increase their tariffs.
“We are buying electricity at a high price and selling it at a lower price, leaving us with huge debts by the end of the month,” he said.
Parliamentary Committee on Budget and Finance Vice Chairperson Ismail Mkumba urged Mera to intervene.
“It is wrong for Escom to buy electricity at a higher price and sell it at a lower price. We will engage Mera and Treasury to find a solution. The economy is struggling, but as a nation, we need electricity, and prices must be realistic,” Mkumba said.
In 2023, Mera approved an 18 percent tariff adjustment for the initial year of the 2023-2027 Base Tariff, effective September 1, 2023.
Overall, Mera approved a 50.8 percent tariff adjustment spread over the next four years.
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