The topic of ‘cost reflective tariffs’ is this edition of ESI Africa’s The Big Question.
ESI Africa poses The Big Question – a question that challenges thinking, inspires reaction and deserves comment. Share your thoughts and insights with the editor and readers of ESI Africa and voice your opinion around some of the burning issues facing the energy and electricity sector today.
Cost reflective tariffs in Africa
The inability to recover utility operating costs via current electricity tariffs is a major barrier to investing in new large-scale generation and transmission projects throughout Africa.
As such, energy ministers attending the 34th Meeting of the Southern African Development Community (SADC) in July, called on its 15 member countries to produce roadmaps for transitioning their electricity supply industries towards cost reflective tariffs by 2019.
The concern for the SADC is that only Namibia and Tanzania have successfully achieved cost reflective tariffs, despite an earlier aspiration for all member States to meet the objective by 2013.
Attaining cost reflective tariffs will assist in efforts to improve the sustainability of the sector and create the basis for greater investment in new generation capacity by state-owned utilities and independent power producers.
The Big Question is what has been hindering African countries from achieving cost reflective tariffs, and what are the potential solutions that balance the commercial aspect along with the unique African socio-economic imperatives?
Share your thoughts on this Big Question in the comments section below.
For inclusion in ESI Africa edition 3-2015, please submit your comment on or before 30 September 2015.