Tanzania raises power tariffs by 8.5 per cent

The Tanzania Electric Supply Company (TANESCO). (Photo: Courtesy)

Tanzania’s energy regulator has approved a power tariff hike of 8.53 percent by the state-run utility, less than half of what the utility said it needed to stem losses.

The Tanzania Electric Supply Company (TANESCO) had sought an 18.19 percent tariff increase to snap a loss-making trend and clear debts to independent power producers and fuel suppliers. The tariff hike takes effect from January 1, the Energy and Water Utilities Regulatory Authority (EWURA) said in a statement on Saturday.

“The proposed tariff increase intends to cover TANESCO’s cost of operation and fund its capital investment programme,” said the regulator. “The increase will also enable TANESCO to demonstrate its bankability to donors offering concessionary loans or grants.”

The regulator said the average tariff would now be increased from 242.34 Tanzania shillings ($0.1114) per kilo-watt hour to 263.02 shillings/kwh. The cash-strapped public utility has been seeking loans from the World Bank, the African Development Bank (AfDB) and commercial lenders to turn around the company and return to profitability.