By the final phase of its tariff adjustment the Ethiopian Electric hopes to amass 35 billion birr per month from the current 7 to 10 billion birr monthly collection.
Early this week, EEP, EEU, the Ministry of Water, Irrigation and Electricity and the Ethiopian Electric Authority and other stakeholders held discussions about the new tariff adjustment which will be applied after approval by the Council of Ministers. This tariff adjustment is the first after 13 years.
In her exclusive interview with Capital this week Azeb Asnake (Eng.), CEO of EEP, told Capital that the maximum revenue the power sector will get from this adjustment, which will be fully effective at the end of the fourth year when approved by the Council of Ministers, is about 35 billion birr instead of the mere 7 to 10 billion birr they currently take in.
This will be done in three parts after it is approved. The regulator of the power sector the Ethiopian Electric Authority is responsible for the tariff adjustment. After the stakeholders’ meeting the Ministry of Water, Irrigation and Energy will submit it to the Council of Ministers for approval.
She said that the adjustment will not touch the majority of the general public.
“Actually the power tariff adjustment is done in accordance with protecting the low income population. We have about 2.9 million customers. Among these, about 1.5 million are using less than 50 KWH per month. So our study assumes that these are the low income groups,” Azeb said. “This figure is more than 50 percent of our total customers and this group will not be affected by the adjustment.
For them, “We will continue with the existing tariff,” she added.
According to the CEO, the other consumers, depending on their consumption are classified in groups. “Our intention is to bring the USD 1.8 cents per KWH to USD 7 cents per KWH which is the original value of the tariff,” she explained.
Even though several years ago stakeholders like the Ministry, power producers and relevant bodies undertook a study for tariff adjustments it was suspended repeatedly by the government.
The tariff was not adjusted for inflation or birr devaluation and thus was subsidized by the government.
“This not a big number, we have not increased anything for many years and though this looks like a leap, it is not. We should have revised our tariff in relation with inflation and devaluation but we have not done that,” Azeb said.
Azeb added “the tariff adjustment is not being applied now, we are discussing it with stake holders and the feedback we are getting is very positive. We agreed that it has to be adjusted because this is the lowest tariff in the world. So we discussed how it should be implemented. And we agreed that the implementation will be done through phases so that we don’t burden the consumers.” EEP is responsible for developing power generation, managing substations and transmission lines and overlooking power exports.
Ethiopian Electric to collect 35 billion birr monthly after new tariff adjustment
ET continues to rise
Ethiopian Airlines (ET) has announced a USD 233 million or 6.87 billion birr net profit in the 2017/18 budget year, a significant growth in terms of birr. When reviewing the annual performance report Tewolde Gebremariam, CEO of the Ethiopian Airlines Group, and his team stated that the airlines registered massive achievements in the past budget year by transporting over 10 million passengers. According to the CEO, it was not an easy year for the business. “The price hike of oil affected our costs. Oil was about 40 percent of our expenses,” he said. Instability in some destinations like West Africa, East Africa and the Middle East were also challenging for them. He also stated that the protectionist policy followed by threats of a trade war between China, the US and Europe affects rapid growing globalization which may put a dent in the industry.
There have been more non-African airlines flying to African cities which cause more competition.
“We are taking advantage of the opportunities that come and has enabled us to register high performance for the year,” he said.
The number of available seats per km has increased by 18 percent compared with the preceding year. Even though Ethiopia’s export was lower, the available freight per ton of km has increased by 16 percent.
During the 2017/18 budget year aviation added 14 new aircraft, which means more than one aircraft per month and 8 new international destinations included during the period meaning Ethiopian has reached 116 cities. The number of local flights has also increased by two reaching 21, which is one of the largest networks in Africa.
The number of passengers carried grew by 21 percent topping the 10 million mark for the first time in the airline’s history and reaching 10.6 million passengers with a 21 percent growth.
According to the statement that ET sent, freight carried grew by 18 percent from the previous fiscal year to attain 400,339 tons.
Due to the 15 percent devaluation the operating revenue grew by 43 percent from the previous fiscal year to culminate at 89.1 billion Ethiopian birr. The net profit stood at 6.8 billion birr. In terms of USD the net profit is USD 3.1 million.
In the 2016/17 budget year the net profit was USD 229 million, while it reached USD 233 million for the past year.
During the fiscal year, the airline was given for the first time in its history a 4 Star rating by SKYTRAX, the leading customer service rating organization in the airline industry, putting it on par with other global airlines. SKYRAX also recognized Ethiopian as Best Airline in Africa; Best Business Class in Africa and Best Economy Class in Africa.
Ethiopian reached and passed the 100th aircraft in service milestone during the year, becoming the first African airline in history to do so. Currently the total operating fleet has reached at 108 airplanes and there are 65 more on order.
Tewolde said that the flight to Asmera is an opportunity for the carrier. He said that besides reducing the fuel cost for the flights in the Middle East and Europe the flight to Asmera is very busy since it is connecting the capital of Eritrea with the rest of the world. For the last 20 years ET has been forced to fly to the Middle East, for some destinations in Arab countries and Europe via Sudan and Djibouti because Eritrea airspace was closed.
ET has also announced that it has agreed with Guinea and Chad to take 49 percent and 45 percent shares of their national carrier and manage the operation. It has also reached an agreement with some other African countries to manage the service inside their country and undertake the management of their operation.
City undergoes complete cabinet reshuffle
Takele Uma who assumed the vice mayor position three weeks ago appointed 18 new officials to lead city departments. They were all approved by the cabinet. The vice mayor currently has the power of mayor.
Nebyu Bayu who heads Addis University’s theater arts department will lead the city’s Culture and Tourism Bureau. Abdulfeta Yessuf will oversee the city’s Trade Bureau and Ermias Kiros the Industry Bureau. Firhiwot Tefera will manage Justice Bureau and Shesema Gerbreslassie the Revenue and Customs Bureau.
Land Management which has faced criticism will be led by Eng. Shemeles Eshetu, The health bureau will be led by Dr. Yohannes Chala.
Dr. Tabor G/ Medhin who served as cabinet spokesperson the last five years will move to head the city education bureau and Abebech Negash will become the cabinet spokeswoman.
In his explanation to cabinet members the Vice Mayor said the reshuffling is to get new blood and new ideas. Almaz Abrha was assigned to lead the Children and Women’s Affairs Bureau which is responsible for overseeing social services affecting women and children. Zewdu Ketsela will lead the city’s labor and social affairs agency and Eng, Yonas Ayalew will oversee the construction office.
“We’ve worked hard over the past three weeks to improve technology so we can issue identity cards to citizens in their kebeles we’ve been announcing our work on local TV and radio.”
“The people who assigned today meet our demands in terms of educational backgrounds and work experience and believe they will help the city meet its goals of providing better healthcare, business, construction, housing, and employment.”
“We are the diplomatic seat of Africa but a lot of work has to be done improve our name, the water problems, and waste in our homes and roads should managed properly.” He added that studies being undertaken to regulate and monitor executive workers so their work will improve.
Addis Ababa’s population of four million continues to grow largely due to internal migration.
Charities get new boost
After an eight month hiatus the second Civil Society Support Program (CSSP II) resumed last Wednesday in the presence of Deputy Prime Minister Demeke Mekonene and British Secretary of State for International Development and Minister for Women and Equalities Penny Mordaunt.
The UK, Ireland, Sweden, and Norway financed a grant worth 17 million Euros which will be in effect for the next three years.
“Civil societies are the school of democracy and good governance,” said Demeke. “The contribution of the CSSP I was crucial, to reducing poverty and advancing good governance.” The deputy prime minister also extended his gratitude to the people who worked hard to make both programs a success.
Penny Mordaunt added that the previous project was a life line for civil societies in Ethiopia as it provided 750 grants for 500 charitable organizations. She expressed her excitement about the next phase of the project during this transitional period in Ethiopia.
“I would particularly commend the move to revise the Charities and Societies Proclamation,” she said. “I believe a more open legislative environment will enable charities to work more freely as unreasonable regulatory burdens will be reduced.”
The Oromia Region Women’s Association was on organization being supported by CSSP I and will be helped significantly when the new phase begins.
The first phase lasted six years and helped civil societies working in women’s education, substance abuse, mental health and prison reform build their capacity. It was funded with 35 million Euros and affected three million lives from 2011-2016.
