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

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

TRENDS IN INFLATION AND EXCHANGE RATES AND THE IMPACT ON ELECTRICITY TARIFFS

MERA noted that inflation and exchange rate were at 22.1% and MK693.50/US$, respectively, as at 3rd May, 2016 used as a basis for consideration of ATAF for April 2018.

Since May 2016, the Kwacha depreciated from K693.50/US$ to K733.95/US$ as noted on 5th April 2018. On the other hand, inflation has decreased to 7.8% as noted in February 2018.

Applying these economic fundamentals to ATAF resulted into a -8.27% potential electricity tariff adjustment. The Board considered the backlog on the implementation of the third and fourth tranches of the second base tariff and the ESCOM’s revenue loss emanating from the delay in implementing the two tranches.

The Board therefore resolved to maintain electricity tariffs as Implemented in February 2018.

 

SIGNED

Dr. Collins Magalasi

  MALAWI ENERGY REGULATORY AUTHORITY

12th April, 2018