Government Transfers Island Power Services to STELCO to Reduce Electricity Costs

The Ministry of Finance and Public Enterprises is restructuring the delivery of utility services across several atolls to lower the government's per-unit cost of electricity generation. As part of this strategic shift, the government has transferred the management of services in 25 islands across Baa, Lhaviyani, and Meemu Atolls from Fenaka Corporation to the State Electric Company Ltd (STELCO). Speaking on PSM News’ “Raajje Miadhu” programme, Deputy Minister of Finance and Public Enterprises Ahmed Saaid Musthafa emphasized that the primary goal is to improve operational efficiency without compromising service quality. He assured the public that the transition is being managed collaboratively between Fenaka and STELCO to ensure that residents experience no disruptions in their daily utility supplies. The move is part of a broader government effort to optimize public expenditure. A significant portion of the national budget is currently allocated to subsidies; the Ministry aims to reduce these costs by enhancing the efficiency of utility providers rather than increasing the financial burden on citizens through higher utility bills. By expanding STELCO's operational footprint, the government believes the company can leverage its existing infrastructure more effectively. STELCO already manages power in Kaafu, Alifu Alifu, Alifu Dhaalu, and Vaavu Atolls. Adding the new regions will increase the total number of islands served by STELCO—including Greater Malé—to 61. Beyond cost reduction, the Ministry intends to align financial assistance provided to state-owned enterprises with current government policy. The ultimate objective is to encourage these companies to operate with greater independence and efficiency, reducing their long-term reliance on state funding while maintaining essential services for island communities.