Mozambique Energy: Power costs rise to continue

Energy tariffs in Mozambique may continue to rise up until Mozambique Electricity (EDM) reaches financial balance between its production costs, the ongoing investments and payments of electricity consumption made by customers.

EDM finance manager Noel Govene explained that tariff adjustment was one of the mechanisms available to achieve financial sustainability, one of the main objectives of ongoing restructuring.

Govene, who spoke last week at a meeting in Maputo, did not categorically state that there would be adjustments in the cost of energy provided to consumers, but stressed that EDM needed financial balance to ensure sustainability.

In recent years, the company has bought energy from Cahora Bassa hydroelectric dam and other suppliers and sold it to the public at a lower cost because of a lack of government authorisation to adjust the tariff.

Figures from EDM indicate that prior to August last year, the last increase in the price of electricity, the company bought electricity at an average cost of ten-and-a-half US dollar cents per kilowatt hour and sold at five cents.

Prior to August last year, energy costs had risen in November 2015 and October 2016, increases aimed at ending this unsustainable strategy.

EDM reported that, thanks to the tariff adjustments, it had improved capacity “enough” to support operations, having been able to implement projects to raise and assure the quality of energy supply throughout the country.

Particularly noteworthy were the replacement and expansion of the Matola substation, which left Maputo and the south of the country without power in 2016, and the new Ressano-Garcia-Macia line, which confers safety and reliability of energy to Gaza and Inhambane.

The rehabilitation of the Chicamba and Mavuzi power stations in Manica is also underway, as well as the expansion of the Chibata substation and the respective line to Dondo.Source: Notícias