Concerns have arisen over the $1.2 billion paid by a Japanese power consortium, which now holds a 44 percent stake in Energy Fiji Ltd (EFL). The Fiji Commerce and Employers Federation (FCEF) has submitted a 21-page document to the Fijian Competition and Consumer Commission (FCCC), questioning the handling of these funds and calling for a reconsideration of the FCCC’s decision to approve an EFL tariff increase slated for December 19, 2025.
The FCEF highlighted what it termed “fatal deficiencies” in the assessment process, particularly focused on understanding how the significant payment from the Japanese consortium has been managed. They argue that the proceeds from the partial privatization, which occurred in 2018, possibly could have financed essential capital works for EFL rather than resorting to raising tariffs for customers. According to FCEF, these funds have not been adequately reconciled against EFL’s capital needs as claimed by the utility.
FCEF pointed out that the current Minister for Finance has remarked that the transaction did not include adequate future safeguards for the country’s strategic electricity utility. They emphasized the importance of transparency regarding how these proceeds were utilized, questioning whether they were reinvested into vital infrastructure or diverted elsewhere, such as to the government’s consolidated fund.
Additionally, FCEF raised concerns regarding EFL’s recent decisions, including a $40.7 million dividend payout to shareholders despite the company reporting an after-tax loss of $24.8 million. They also noted that EFL’s low gearing ratio, estimated between eight and 26 percent—significantly below the industry norm of 60 to 100 percent—suggested a potential borrowing capacity of approximately $257.1 million that had not been tapped into.
FCEF has also challenged EFL’s anticipated demand growth, asserting that the projections of a nine percent increase in 2024 and five percent annual growth, which would necessitate nearly doubling generation capacity in four to eight years, have not been independently verified. They pointed out that these claims must align with Fiji’s demographic realities and the uncertain state of the commercial sector.
As a corporatised private entity functioning as a regulated monopoly, FCEF insists that EFL should adhere to specific corporate financial standards, emphasizing that any capital needs should be met through various alternatives—including borrowing and shareholder contributions—before imposing costs on consumers. They assert that the current regulatory approach inadvertently prioritizes consumer tariffs over exploring other financing options.
The ongoing evaluation provides an opportunity for stakeholders to push for greater accountability and a more balanced approach to capital financing within the energy sector, with hopes of fostering transparency and safeguarding consumer interests. This situation underscores the critical need for comprehensive oversight in sectors that operate as monopolies, ensuring that the regulatory framework serves its intended purpose of protecting consumers.