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Cabinet has approved the last phase of the electricity tariff increase approved by the Commerce Commission in September 2004, with effect from 1st August 2008. The average increase across all tariffs will be about 1 cent per unit. Over 90% of domestic customs will be exempted because the tariff increase will not apply to low income domestic customers who consume less than 250 units of power (i.e. about $50 per month). All religious organisations, schools, street lights and other non profit organisations will also be exempted from this tariff increase. Cabinet based its decision on a submission by the Minister for Finance, National Planning, Sugar Industry and Public Utilities (Water & Energy), Mr Mahendra Chaudhry. Mr Chaudhry said that existing cash flows from operations are inadequate to fund the Fiji Electricity Authority’s (FEA) renewable energy development program, which is essential to reduce Fiji’s exposure to imported and high-cost diesel fuel for electricity generation. “The additional revenue from the tariff increase will be used for the construction of new renewable power capacity, especially the Nadarivatu hydro power project with substantial benefits to Fiji.” Government will further assist the FEA in this regard with an increase in the level of the Government Guarantee on FEA’s borrowings by $100 million, from the current F$230 million to F$330 million. The validity date of this guarantee has been extended by one year from 31st December 2008 to 31st December 2009. Mr Chaudhry explained that the construction of Nadarivatu Hydro Power project will result in additional power capacity which is essential to meet national electricity demands thus providing a secure and reliable power supply to the nation in the short, medium and long term. He said that the construction of the Nadarivatu hydro power project will see the creation of hundreds of new jobs during construction over the next 4 years up to 2011. He added that upon completion, the country will experience diesel cost savings resulting in a reduction in diesel imports by the year 2011. -Ends- No:1206 |
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