Mozambique: Price cuts will cost EDM 15 million dollars

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Mozambique: Price cuts will cost EDM 15 million dollars

4:29 CAT | 03 Jun 2020

Photo: O País

Mozambique’s publicly-owned electricity company, EDM, expects to lose about 15 million US dollars this year from the price cuts ordered by the government, as part of its response to the coronavirus pandemic.

Two categories of electricity consumers will see their electricity bills fall. Those households who pay the “social tariff” will benefit from a 50 per cent price cut. These are households which only use a small amount of electricity, up to a maximum of 125 Kva (kilo-volt-amperes). EDM says there are 2,964 of them.

The second, and much more significant, cut is a 10 per cent reduction in the general tariff. The name is slightly misleading, since it is not the tariff paid by most domestic consumers, but the tariff applied to businesses.

Small and medium sized businesses will benefit from this reduction. These are EDM’s large consumers of low voltage power, and of medium voltage power up to 200 Kva.

Speaking at a Maputo press conference on Wednesday, EDM spokesperson Luis Amado said a third measure is to allow businesses to defer payment of the fixed fee on their electricity bills. In addition to paying the general tariff, which varies depending on the number of kilowatt-hours used, these businesses also pay a fixed fee. Under the package announced by Amado, they can defer payment of the fixed fee for six months.

These measures are all intended to protect businesses and the poorest consumers from the economic impact of the Covid-19 pandemic.

Consumers on the social tariff “have been protected in all the electricity price rises of the last four years”, said Amado. “This is to allow continued expansion in the number of EDM’s clients as we move towards universal access”.

The low voltage clients on the general tariff, he said, are offices, workshops and other small businesses who have installed power of between 19.9 and 39.9 kilowatts.

Amado said that, taken together, these price cuts will deprive EDM of about 15 million dollars.

Mitigation measures are already being implemented, he added, and EDM is working with the government to identify further compensatory measures. He was confident that EDM will be able to meet its target of 300,000 new connections this year.

In the northern province of Cabo Delgado, terrorists destroyed the electricity sub-station in the town of Macomia last Thursday. This sabotage deprived the districts of Macomia, Meluco, Quissanga, Ibo and Muidumbe of power.

Amado said that restoring the electricity supply to these districts will depend on the security conditions. As soon as the government, or the defence and security forces, give the go-ahead, EDM will begin work on repairing the damage.

Source: AIM