Mozambique: Pre-Paid Electricity Goes Online

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As from the second half of this year, Mozambican consumers will be able to pre-pay for their electricity online.

The pre-payment system, known as Credelec, allows consumers to control how much energy they are using. It eliminates monthly bills, and meter readings, and is thus very convenient for the electricity company, EDM.

The pre-paid price per kilowatt-hour is considerably more than the price paid by those consumers who opt to continue receiving monthly bills. But, just as with the pre-paid cards for mobile phones, consumers appear to believe that the convenience outweighs the extra cost. Currently 78 per cent of electricity consumers use Credelec.

But since large scale consumers do not pre-pay, Credelec accounts for a minority of EDM revenue - 27 per cent in Maputo, 29 per cent in the rest of southern Mozambique, 24 per cent in the central provinces, and 20 per cent in the north.

The project to allow consumers to pre-pay online involves a contract signed on Thursday between the chairperson of EDM, Manual Cuambe, and Damian Padachi, General Manager of the South African computer company, ITRON. EDM will pay 145.8 million meticais (about 4.7 million US dollars) for the system to be implemented by ITRON.

Under the current arrangement, there are 15 isolated Credelec servers, and over 140 sales posts, without any interconnection. With the new scheme, the off-line Credelec systems will gradually be replaced by on-line ones, starting with Maputo in July-August this year, and covering the rest of the country by July 2012.

The new system will allow consumers to purchase pre-paid vouchers, not only at EDM branches, but at many other shops, at the Automatic Teller Machines (ATMs) of banks, and via the internet or through mobile phone text messages. This is analogous to the way in which pre-paid vouchers for mobile phones are sold.

And, just as mobile phone pre-paid vouchers can be purchased from itinerant vendors, this method will also be used for Credelec. "The recharge vouchers will be on sale in the streets", said EDM Commercial Manager Jose Buque. "This will greatly help those clients who live in rural areas, particular where there are no banks or shops".

Perhaps the greatest innovation is that Credelec consumers will be able to buy their vouchers anywhere in the country, and not just the area where they live. The new system also eliminates the risk of paying taxes twice in the same month.

All consumers of electricity must pay a monthly radio fee, and a municipal rubbish collection fee. Consumers who buy Credelec electricity more than once a month, have to struggle to avoid paying these fees more than once a month. Once the on-line system is installed, this will be dealt with automatically.

At Thursday's ceremony, Cuambe said that putting Credelec online was part of EDM's modernisation. There would now be a single national data base for Credelec, which Cuambe believed would improve sales services and facilitate internal management.

He predicted "a substantial improvement in the relationship with our clients, and in the company's financial management".