NamPower is moving to introduce prepaid meters for all its distribution customers, including regional electricity distribution companies (REDs), as part of measures to improve its debt management.
The power utility aims to convert all its distribution customers to prepaid meters by July 2025. This will see electricity distributors now expected to pay upfront for their electricity supplies, addressing the ballooning debts owed to NamPower.
The project will be implemented in phases, starting with small power users (supply points with a capacity of less than or equal to 75 kilovolt-amperes, or kVA) and followed by large power users (supply points with a capacity of 100kVA or more).
NamPower is also set to embark on stakeholder engagements, with meetings scheduled for Gobabis, Windhoek, Mariental, and Keetmanshoop next week.
The national power utility noted that the comprehensive prepayment system installation project involves the implementation of prepaid meters for all its distribution customers.
“This initiative harnesses modern metering technology to improve account management and provide a more efficient response to customer requests regarding the transition to a prepayment system.” NamPower said in notice.
The decision to transition to prepaid meters was made in response to the pressing issue of outstanding debts owed to NamPower by clients. Notable debtors include Northern Region Electricity Distributor (Nored) with 23% of the debt, Rehoboth municipality with 10% and City of Windhoek with 9%.
Erongo Red is one of the REDs that do not owe NamPower.
Among these outstanding debts, N$712 million is owed by defaulters who face potential disconnection, with an additional N$74 million in interest. The remaining N$842 million represents the current outstanding balance for May 2023.
NamPower had previously announced a debt recovery plan that involved disconnecting defaulting customers, but this has been suspended until the end of August. The decision follows a consultative meeting held in August between the NamPower Board of Directors, Management, and the Minister of Finance and Public Enterprise. During the meeting, the government agreed to intervene in addressing NamPower’s outstanding debt of N$1.5 billion.
Earlier, NamPower had introduced an incentive where the interest portion of the outstanding debt accumulated over the past 12 months would be waived if the customer settled the full amount on or before 31 May 2023. This measure aimed to encourage customers to settle their debts. However, this incentive only applied to the interest charged on the specific outstanding capital amount, up to a maximum of 12 months.
The introduction of prepaid meters is expected to help NamPower improve its debt management by ensuring that customers pay for their electricity upfront. This will also help to reduce the risk of disconnections and improve customer satisfaction.
