Ethiopia’s recent policy to increase electricity tariffs, while essential for long-term energy sustainability, might become a double-edged sword. While the reform aims to attract investment and improve infrastructure, it also threatens to exacerbate economic hardships for many low-income households and businesses. However, it’s important to note that these reforms also hold the potential to significantly improve the country’s energy sector, paving the way for a more sustainable and efficient future. A careful navigation of this delicate balancing act is urgent, as the benefits of increased tariffs to improve investment needs to outweigh the opportunity costs to consumers. EBR’s Munir Shemsu navigates the intricate issue and offers this report, urging stakeholders to understand and support these crucial reforms.