THE Commerce Commission's initiative of increasing the independent power producer's rate from 23 cents to a minimum of 33.08 cents is an incentive for renewable energy producers.
Speaking in Labasa during a consultation with taxidrivers, Minister for Energy Aiyaz Sayed-Khaiyum said this was an example of government's incentives for renewable energy producers in the country.
Mr Sayed-Khaiyum described the move as an incentive for those wanting to set up a company to supply electricity sourced from renewable energy.
"It is basically known that to set up a renewable energy plant, the initial investment is quite high so the rate of return obviously will be reflected on the unit price sold to the grid," he said.
"Previously, it was 23 cents so now its 33.08 cents with the hope that obviously there will be a number of IPPs that would be interested in providing electricity."
Earlier, commission chairman Mahendra Reddy said they met stakeholders to discuss IPPs in the energy sector and re-looked at tariff rate, which was one of the key factors that determined entrance of IPPs into the sector.