Electricity customers of Vanuatu Utilities Infrastructure (VUI) Limited in Santo, Ambae, Maewo and Sola, Banks will be benefiting from a reduced electricity tariff effective May 2025. This was an outcome of a recent annual tariff adjustment exercise conducted by the Vanuatu Utilities Regulatory Authority (URA).
The URA has finalized the annual tariff adjustment on 23rd April 2025 which allowed the current tariff to be adjusted downwards by 10%. The reduction will be carried out in 2 stages; the first stage is a 5% reduction that will be implemented by VUI Ltd starting in May 2025, allowing the current tariff to be reduced to 58.32 Vt/kWh, and the second staged reduction to be carried out in November 2025. These reductions will contribute to decreases in monthly bills for VUI Ltd’s electricity customers, especially business customers that should experience up to 20% reduction in monthly electricity bills from May onwards.
The reduction in the electricity tariff for VUI is attributed mainly to the significant increase of 25% growth in electricity demand mainly in Luganville, inflation being stable, allowing only a 1.7% increase in the Consumer Price Index (CPI) for Luganville.
In 2024, the Utilities Regulatory Authority (URA) had issued a revised electricity tariff to Vanuatu Utilities & Infrastructure Limited (VUI Ltd) that was implemented in February 2024. The tariff implemented is a uniform base tariff of 60.75 Vt/kWh that has been applied to all VUI Ltd customers on Vanua Lava, Luganville, Maewo, and Ambae enabling a cross-subsidy from business customers to small domestic customers.
The uniform tariff is to be effective for a 3-year period from 2024 to 2026. Within this period, there are monthly and annual tariff adjustments. The monthly tariff adjustments account for changes in fuel cost and the contribution of renewable energy to generating electricity. The annual tariff adjustments include VUI Ltd investment cost, inflation changes, and demand changes for the year.
From 7th to 16th April 2025, the URA had discussions with VUI Ltd regarding the annual tariff adjustment. The URA had carried out a technical and financial audit of all VUI Ltd’s funded investments for the year 2024 that amounted to VT 126M of which more than 98% were for investments in Luganville and included VT 13.4M for 181 new customer connections for 5 to 10 amperes meter connection size that were discounted by 50%. The discount connection is a new initiative by the URA that was implemented by VUI Ltd in early 2024 with the revised tariff to increase on-grid electricity access.
The URA will continue to work closely with VUI Ltd to address electricity customer concerns and align the utility and the Vanuatu Government’s interests to deliver on its policy objectives outlined in the National Sustainable Development Plan. More information on the electricity tariff adjustments is available online.