The Utilities Regulatory Authority (URA) has announced a revised electricity tariff of 64.29 VT/kWh for VANPAWA customers in Tanna and Malekula, effective from October 2025 for a period of 12 months. This represents a 1% reduction from the previous rate of 64.89 VT/kWh and will apply uniformly to all customers in the two concession areas.

VANPAWA is a subsidiary of the Vanuatu National Provident Fund (VNPF) that was established after it had been awarded the Tanna and Malekula Electricity Concessions in May of 2022. VANPAWA officially took over the concessions from the Vanuatu Department of Energy in May of 2023. Due to delays experienced by VNPF in establishing a separate management for VANPAWA, the URA tariff determination process had been delayed to this year, 2025 to ensure that the true cost of service is captured in the revised tariff.

In August 2025, URA conducted consultations with VANPAWA and its electricity customers. The most pressing concern raised was the reliability and safety of electricity services. URA has mandated VANPAWA to invest in infrastructure and staffing to address these issues during the current tariff period. These costs have been incorporated into the revised tariff.

Key changes captured in the revised tariff include;

1. Monthly Tariff Adjustment Formula (TAF): The tariff will adjust monthly based on fuel prices and renewable energy usage, particularly from the Brenwei hydro plant commissioned in December 2023. Rising fuel costs may increase tariffs, while greater hydro energy use will reduce them.
2. Power Purchasing Agreements (PPA): VANPAWA in May 2025 signed a PPA with Mana Pacific to construct a solar plant that will produce and supply solar power to VANPAWA. Should this construction be completed within the tariff period, benefits from cheaper produced electricity can be passed on to electricity consumers through the TAF.
3. Force Majeure fund: The Force Majeure Fund is a cost-effective financial reserve designed to help VANPAWA manage unexpected events, such as cyclones, without relying on expensive third-party insurance. Electricity customers in Tanna and Malekula contribute to this fund through their bills. The fund is managed by VANPAWA and independently audited by the URA. In the event of a natural disaster or other unforeseen incident, VANPAWA can use this fund to cover recovery costs, helping to prevent sudden increases in electricity tariffs for customers.

Finally, the URA appreciates VANPAWA’s cooperation during this tariff review process and will continue to work closely with VANPAWA management to ensure that electricity customers on Tanna and Malekula receive safe, reliable, and affordable electricity service.