Proposal for new electricity tariffs in the Republic of Congo

December 7, 2017

 

 

 

On 24 July 2017, the consortium ICEA-RICARDO presented the results of the electricity demand and tariff study to the Congolese authorities (Ministry of Energy, ARSEL and SNE).

 

The objective of this study, financed by the World Bank and the Congolese State through the PEEDU (Water, Electricity and Urban Development Project), is to determine electricity tariffs that ensure the financial balance of the sector and its development while improving the living conditions of the populations.

 

ICEA and RICARDO first established demand projections, production forecasts and optimal production mix, and then defined the corresponding investment program. The average cost of service was assessed using technical-financial modeling of the sector and the SNE. In the baseline scenario, it amounts to CFAF 94 per kWh sold over the tariff revision period (2018-2022), which is almost twice the average unit selling price of electricity estimated at CFAF 48 per kWh in 2016.

 

ICEA and RICARDO then proposed a tariff structure to restore the financial balance of the sector while being adapted to the capacity/willingness to pay of consumers. It is based on “increasing block tariffs” where the price of electricity increases with the monthly consumption in order to promote energy control. Domestic consumers receive subsidies from other categories of customers, and a so-called “social” block has been created to limit the burden of electricity expenditure for the poorest households and to reduce energy poverty. The new tariff structure therefore contributes to greater equity and social justice. ICEA and RICARDO also proposed measures to accompany the tariff revision and optimize its effectiveness, including the deployment of prepaid meters for domestic customers and the introduction of subsidies for residential connections.

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80, rue Taitbout

75009 Paris - France

Tél : +33(0) 1 44 51 65 31

Fax : +33(0) 1 44 51 09 59 

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