The Electricity Supply Corporation of Malawi (Escom) says tariffs will continue rising until the parastatal begins making profits from the production and distribution of electricity.
Escom recently raised electricity charges by 29 percent to the surprise of consumers who expected the tariffs to go down on account of the strengthening kwacha and the Energy Efficient Lighting Programme (EELP) that saw installation of energy saver bulbs in residential areas.
Escom communications manager Kitty Chingota told a group of district information officers (DIOs) in Blantyre on Thursday that the parastatal sells power at a loss and tariff adjustments will continue to enable the organisation to break even.
The journalists from the Ministry of Information were on a media tour of an $84.7 million [K27 billion] World Bank-funded project that will see the refurbishment of Escom generation, production and distribution systems, among other things.
“Basically, the increase in tariffs is meant to get to a point where the cost of electricity production will equal the tariffs,” said Chingota.
According to Chingota, currently the corporation is charging K6 per unit of electricity which she said is produced at a cost of K12.
When President Joyce Banda took over in 2012, government announced a cost-reflective policy in the energy sector after removing subsidies that cushioned Malawians against the vagaries of the volatile fuel market.
Escom director of planning and development Lameck Mchembe said with the current tariffs, it is difficult for the corporation to implement expansion projects such as new power stations.
“The current tariffs can only meet costs of maintenance and other smaller costs,” said Mchembe.
