Ethiopia will roll out increases to electricity tariffs starting as of September 11, 2024 as part of a four-year plan to stabilize revenue while protecting lower-income consumers, according to the head of the state utility.
Tariffs have long been below cost-recovery levels, weighing on the finances of the state-owned Ethiopian Electricity Utility (EEU).
Shiferaw Telila, Chief Executive Officer of the EEU, said in a press conference today that the Council of Ministers approved the tariff adjustment in June 2026. It aims to cover rising infrastructure costs after years of below-market pricing for consumers.
Residential customers using less than 50 kilowatt-hours per month will see 75 percent of any price difference subsidized initially. Those using 50-100 kWh will receive a 40 percent subsidy, with support tapering for higher consumption brackets.
Shiferaw said Ethiopia's tariffs have historically been among the lowest in sub-Saharan Africa and the multi-year phase-in brings prices more in line with peers while easing the burden on bill-payers. Payments will be collected in 16 installments through 2021.
"We have done this to protect low-income households," the CEO added.
The reforms are aimed at securing investment for electricity sector expansion after over a decade of rapid economic growth doubled power demand. Progress on hydropower and transmission projects is central to the government's development strategy and goals for industrialization.
The World Bank and International Monetary Fund have made their recent pledged funding support to Ethiopia contingent upon the government implementing critical reforms. One of the key conditions was a gradual increase to electricity tariffs that were discussed when Ethiopian officials met with the multilateral lenders.
