Energy Fiji Limited (EFL) has underscored the need for a tariff increase to protect Fiji’s renewable energy ambitions and maintain the company’s financial stability. In its recent electricity tariff proposal, which it has made public, EFL warns that without an increase, significant delays in major renewable energy projects could occur, leading to a reliance on expensive thermal fuel generation.
The company has ambitious plans to invest nearly $1 billion over the next five years as part of its 10-year Power Development Plan. This initiative includes several key hydro projects on the island of Viti Levu, which are essential for advancing the country’s renewable energy capabilities. However, EFL cautions that if tariffs do not rise, its debt could surpass $1.1 billion by 2027, exceeding the acceptable gearing levels required by its lenders.
Moreover, EFL points out that rising maintenance, fuel, and financing costs, combined with a rapidly growing asset base, have eroded returns under the current tariff system. The proposed tariff increase is viewed as a crucial measure to ensure a reliable power supply, facilitate the ambitious target of attaining 90 percent renewable energy by 2035, and prevent potential future government bailouts.
Through this tariff adjustment, Energy Fiji Limited aims to bolster its operational sustainability and play a significant role in Fiji’s transition to sustainable energy solutions. This proactive approach not only supports the company’s financial health but also reinforces Fiji’s commitment to a greener future, emphasizing the potential for a robust renewable energy sector in the coming years.