The Utilities Regulatory Authority (the Authority) has approved a revised electricity tariff of 80.73 VT/kWh for customers of VANPAWA in Tanna and Malekula. The revised tariff takes effect from August 2026 and will remain in place for three years. This represents a 26% increase from the previous base tariff of 64.29 VT/kWh and a 13% increase from the current subsidized effective tariff of 71.42 VT/kWh applied to customer bills in September 2026. Due to the tariff implementation process, the revised tariff will be reflected in customer bills issued from October 2026.
VANPAWA is a subsidiary of the Vanuatu National Provident Fund (VNPF) that assumed operation over the Malekula and Tanna electricity concessions in 2023 after VNPF was awarded the concessions on 6th May 2022. In August 2025, the Authority determined an interim tariff of 64.29 VT/kWh for a 12-month period to enable VANPAWA to set up its management arrangements and operate independently from VNPF.
As part of the tariff review, the Authority had consulted with relevant stakeholders including provincial governments and carried out awareness on Malekula and Tanna from 19th to 24th July 2026. During the consultation and awareness, multiple issues were raised mostly related to service reliability and accessibility. The Authority within the tariff period will be monitoring VANPAWA and mechanisms set to address these issues.
The tariff increase is primarily driven by rising fuel costs, particularly in the Tanna concession area, where electricity generation remains heavily dependent on diesel fuel. Under the uniform tariff structure, the benefits of hydro electricity generation from the Brenwei hydro facility in Malekula are shared across both concession areas, including Tanna.
To help ensure tariffs remain cost-reflective and can decrease when costs fall, the Authority has introduced the following mechanisms:
1. Actual prudent investment by the utility to address reliability and accessibility issues. These investments are incorporated into the tariff annually once audited by the Authority.
2. Monthly fuel cost adjustments to ensure changes in diesel prices are reflected promptly in customer tariffs. Customers will benefit when fuel prices fall.
3. Minimum efficiency targets for hydro electricity generation, requiring the utility to generate a minimum level of electricity from hydro sources each year to reduce dependence on diesel generation and minimize fuel costs.
The Authority appreciates VANPAWA’s cooperation during this tariff review and looks forward to its support in achieving the Vanuatu Government’s policy objective under the National Energy Road Map.