President Dr Mohamed Muizzu announced on Monday a major policy shift that will allow city and island councils across the country to pay domestic electricity rates for public lighting, beginning 1 January 2026. The measure is intended to ease financial pressures on local administrations and reinforce the country’s decentralised governance framework.
The directive, shared via the president’s official X account, instructs utility providers Fenaka Corporation and the State Electric Company Limited (STELCO) to apply the lower domestic tariff to electricity used for lighting roads and other public spaces. Councils are currently billed at higher rates designated for government agencies.
"Fenaka Corporation and STELCO will bill councils across all cities and islands for public and street lighting at domestic electricity rates,” President Muizzu said. He added that the resulting savings would allow local governments to redirect funds toward essential municipal services.
The President’s Office described the initiative as part of a broader effort to strengthen the financial autonomy of local councils. For years, many councils have struggled to meet payment obligations due to steep electricity bills. Until now, only mosques have qualified for domestic electricity rates.
The announcement follows a series of recent steps by the administration of President Muizzu to expand local governance capacity. On 5 September, the president proposed doubling the budget allocation for women’s development committees (WDCs), with the increase slated for inclusion in the State Budget 2026.
Plans are also underway to revise the fiscal formula used to calculate block grants for local councils. The current system, which often disadvantages smaller populations, will be updated to account for the physical size of each island. The revised formula is expected to be incorporated into the 2026 budget proposal. In addition, the Ramadan allowance for WDC members will be formally integrated into council budgets.