The Electricity Control Board (ECB) says the annual electricity tariff increment is necessary for the country to avoid load shedding.
“Some of these things need to be done or the country will experience energy shortages such as our neighbours in Angola, South Africa and Zimbabwe, as utilities are not recovering enough money to balance out the cost of running their operations,” said ECB General Manager of Economic Regulation Pinehas Mutota.
This was after ECB’s Acting Chief Executive Officer Rachel Boois announced on Thursday that the regulator’s board had resolved to increase the average bulk tariff by 7.3% from the current approved tariff of N$ 1.6982 per kilowatt-hour to N$1.8222 per kilowatt-hour for the period 2022/2023 effective from 01 July 2022.
The approved increase follows a tariff decrease in 2019/2020 and an increase of 2.29% in 2021/2022. There was no tariff movement in 2020/2021 as the country was battling the coronavirus pandemic.
However, the approved tariff is applicable to NamPower bulk customers (i.e. Regional Electricity Distributors (REDs), Local Authorities, Regional Councils and Mines).
NamPower recently submitted a tariff application for an effective bulk tariff (inclusive of generation and transmission) increase of 12.78%, which would have resulted in an average increase of N$ 1.6982 per kilowatt-hour (kWh) to N$ 1.9153 per kilowatt-hour for the financial period 2022/2023.
“In reviewing the tariff, the ECB considered several factors, including the impact of the tariffs on the Electricity Supply Industry, consumers, and the economy at large. In particular, the impact of the COVID-19 pandemic on several industries and the consumers, as well as the current economic climate, were considered,” said Boois.
“It is the responsibility of the Regulator to ensure a sustainable electricity industry at affordable tariffs and we have done so.”
Rojas Manyame, ECB General Manager of Technical Regulations, said the tariff increase would have been 8.96 percent had the government not availed N$100 million through the National Energy Fund (NEF), to cushion consumers.
“When government reviews the tariffs, they look at the affordability of the investment coming and find ways to mitigate the cost for the consumers. At the end of day, they want Namibia to be competitive in terms of industry, and attract investments into the country and for all projects to be viable, we aim for the tariff to be competitive to compete with other nations,” he said.
“Usually investors often complain that the country’s tariffs are high, thus the money given by the government cushions the sector.”
