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The adjustment made to the electricity service tariff, set to take effect starting from the upcoming New Year, aligns with requirements set forth by the International Monetary Fund (IMF). It is recalled that on Wednesday, September 6, 2023, the Council of Ministers approved the adjustment to the electricity service tariff on June 20, 2023. Following this, the revised tariff for Ethiopian Electric Power will be effective from September 11, 2024.
The Chief Executive Officer of the institution, Engineer Shiferawu Telila, explained 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 categorized 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. 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, “They will be subsidized according to their usage, with the difference between what they currently pay and the increase.”
The subsidy will cover 75% 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.
The tariff adjustment is part of a larger effort by the Ethiopian government to meet IMF conditions while ensuring electricity services remain affordable for vulnerable groups through subsidies.
