The Ministry of Mines and Energy says it will provide funding for 400 off-grid households, which will be financed through the Solar Revolving Fund, in an effort to promote rural electrification.
To achieve this objective, the Ministry of Mines and Energy established strategic alliances with Regional Electricity Distributors that allow consumers living in known areas to make use of the available financing program and subsidy, to enable them to have access to electricity by connecting to the grid.
“The SRF offers subsidised loans to citizens at an interest rate of 5% per annum over a five years period. Moreover, grid connections are financed at maximum loan amount(s) of N$150,000. The revolving element of loans financed through the SRF is to ensure more people benefit from the SRF,” said Bryan Eiseb, the Ministry’s acting Executive Director.
He said this at the launch of the Service Level Agreement between the Ministry through the Solar Revolving Fund and the Northern Regional Electricity Distributor (NORED).
The agreement covers the grid-connections financing mechanism intended for off-grid communities living in the NORED licensing areas.
“The government through the Ministry has identified rural electrification as a program of critical importance to improve the livelihood of rural communities and promote socio-economic development in the country. Rural household grid connections have been a challenge due to dispersed rural settlements, which contributes to high costs of connection per household,” Eiseb explained.
Even though grid infrastructure is available in many rural communities, the connection still requires funds to be made available, to procure the required infrastructure, he added.
“These connection costs vary, depending on the distance between the grid lines and the household to be electrified, and may include components such as transformers, cables, poles, labour, and other associated costs,” he reiterated.
Meanwhile, NORED Chief Executive Officer (CEO) Fillemon Nakashole conceded about challenges with electrification, which he says are compounded by the terrain and landscape which in some instances are too rocky, vast, or remote.
“To mitigate this challenge, this collaboration is to complement other initiatives towards achieving the objective of universal access to electricity in Namibia, through off-grid consumer connection, mainly our rural communities, to make use of the SRF financing and subsidy,” Nakashole said.
According to the Namibia household national data of 2016, there are 235,884 rural households, of which only 35,855 are connected to the grid, while 18,324 rural households have access to solar energy. This gives a rural electrification rate estimation of 20%.
“Furthermore, the statistics show that over 80% of rural households use woods for cooking and over 50% of rural households use battery lamps, flashlights, or cellphones for lighting, with 10% using candles,” said Eiseb.
The agreement, Eiseb said, is in line with the Harambee Prosperity Plan II, which aims to electrify about 6,000 rural and 13,000 peri-urban households.
“Therefore, this financing mechanism aims to contribute toward achieving the energy goal of secure and cost-effective energy supply. In addition, electricity is a key input of production, and as such, limited access compromises the socio-economic development of rural communities. Hence The Ministry through SRF will continue to roll out the grid-connection financing mechanism to all the REDs, to accelerate the expansion of grid electrification throughout the country,” he emphasised.
In the same vein, Nakashole stated that over the past two decades, NORED has invested in electrification through grid infrastructures, both in peri-urban communities and growth points across its area of operation, resulting in more than 141,000 customers, consisting of both households and businesses being connected to the electricity distribution network or grid network.
He therefore highlighted that the tripartite strategic collaboration seeks to achieve universal access to electricity for the Namibian population.
