The Ethiopia Electric Utility (EEU) has removed up to 9% interest charges on credit-based payments for new electricity connections, reducing the additional cost for customers who cannot afford to pay connection fees upfront.
According to Eng. Getu Geremew, CEO, this interest free service for new electricity connection helps to reduce the additional cost for customers who cannot afford to pay connection fees upfront.
19,231 new customers were connected to electricity within two weeks of the launch of this new credit-based metering system in June.
Under the previous credit system, customers could spread connection payments over as long as 24 months. Installment plans extending beyond six months were subject to interest charges ranging from 3 percent to 9 percent. Now this interest charge has been completely removed.
The removal of the charges allows customers to divide their connection payments over an agreed period without paying interest, Eng, Getu said. The measure is intended to reduce the upfront financial burden associated with securing a new electricity connection.
Eng. Getu explained that the removal of the interest charge will help to expand access to electricity and increase the number of new customers by reducing the financial strain.
EEU plans to connect 1.1 million new customers during the 2019 Ethiopian fiscal year as part of efforts to expand electricity access.
Eng.Getu said the credit-based arrangement would help increase the number of households able to obtain new connections.
The utility has connected about 5.88 million customers over its 70-year history and now has the capacity to connect nearly one million new customers annually, according to Eng. Getu.
EEU connected 664,505 new customers during the 2018 Ethiopian fiscal year.
