Riccardo Ridolfi
As Tanesco awaits approval of its nearly 20% power tariff increase application, Tanzania's energy regulator plans to invite stakeholders to deliberate on the decision.

In East Africa, the Tanzanian Energy and Water Utilities Regulatory Authority (EWURA), has declared that there will be consultations to determine if the 18.19% tariff increase requested by the national power company, expected to come into force in January 2017, is justified.

Tanzania Electric Supply Company (Tanesco) managing director, Felichesmi Mramba, told local media The East African that the proposed tariffs were for automatic adjustments, which are reviewed on a quarterly basis.

Maramba said: “These adjustments will enable Tanesco to fund its operational costs, capital investment programme, to demonstrate its bankability to donors offering concessionary loans and grants, to increase capacity needed to meet system peak demand and to adequately fund and ensure a consistent and stable supply of electricity on Tanzania.”

Media reported that the proposed tariffs would have raised power supply costs from $0.11 to $0.131/kWh.

Power tariff increase application

It is reported that when the news broke last week, it was not positively received by the various customer categories who said the increase would make life harder.

Tanesco’s application is expected to bring changes in fuel, inflation and exchange rates.

“We see no reason to increase power tariffs. This is against the government of Tanzania’s promise to harmonise power costs as to stimulate industrial production and business,” Confederation of Tanzania Industries’ director of policy and advocacy, Hussein Kamote said.

Power consumption costs contribute to between 20-40% of the total production costs to manufacturing industries in the country, media reported.

Investment

It is reported that Kamote said higher power costs would derail Tanzania’s industrial development plans and make businesses less competitive in regional markets.

Media reported that in June 2016 the government announced its plans to invest approximately $1.2 billion in Tanesco over the next 11 years in a move to help improve the investment potential of the utility company by attracting private sector investors to support improvements to generation, transmission and distribution facilities.

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