The Ethiopian Electric Utility (EEU) announced a new electricity service tariff set to take effect from the upcoming Ethiopian New Year, Ethiopian Electric Utility said on Wednesday.
The new electricity service tariff is based on requirements set forth by the International Monetary Fund (IMF).
The government of Ethiopia pledged to increase electricity service tariff to obtain loans from the IMF and the World Bank.
However, EEU’s Chief Executive Officer Engineer Shiferaw Telila said that the tariff increase is based on customers’ energy usage.
Therefore, household customers, commercial establishments, small industries, large industries, and street lighting users have been categorised accordingly.
“The IMF has mandated reforms that include rationalizing subsidies and adjusting tariffs to reflect actual service costs as part of Ethiopia’s broader economic reform program,” Telila said.
These reforms aim to make state-owned enterprises like Ethiopian Electric Power financially sustainable, reduce public debt, and improve service delivery.
Regarding household electricity users, Engineer Shiferawu stated, “EEU will be subsidizing according to their usage, with the difference between what they currently pay and the increase.”
The subsidy will cover 75 percent of the difference for customers using less than 50KW, 40% for those using between 50KW and 100KW, and a scaled subsidy system will be applied for those using more than 500KW, based on consumption.
According to the CEO, the tariff adjustment (an increase of 6 Birr) will not be charged all at once but spread over 16 accounting periods over the course of four years starting from September 11, 2024.
He added that customers using 50KW/hr, who currently pay 27 cents, will pay 35 cents starting in September.
