NamPower blames N$960m arrears on ECB tariff decision
NamPower has attributed a significant portion of the N$960 million in arrears owed to it to the Electricity Control Board’s (ECB) withdrawal of an 8% tariff increase for the 2025 financial year. The ECB’s decision has prevented NamPower from implementing an 8.7% increase, limiting its ability to recover operational costs, the utility reported.
This was disclosed by Christo Visser, NamPower’s senior manager for electricity tariffs.
In addition to this setback, NamPower is dealing with a substantial write-off of N$157 million due to unpaid bills for the 2024 financial year. The total outstanding debt of nearly N$960 million underscores the utility’s struggle to collect revenue from its customers.
Visser emphasised that delayed payments, combined with a lack of financial support, are exerting additional pressure on NamPower's ability to fund its operations and infrastructure projects. He expressed concern that the unpaid N$960 million is placing the government in a difficult position, which he described as unfair.
NamPower also faces risks from fluctuations in river flow levels, particularly at the Ruacana hydroelectric plant, which provides 30% of Namibia's energy supply. Visser explained that a deviation of 100 GWh in river flow could result in a revenue impact of N$200 million, highlighting the risks of reliance on hydropower.
In addition, Namibia depends on energy imports from regional suppliers such as Eskom in South Africa and Zesco in Zambia. Visser noted that with Eskom recently securing a 12.7% tariff increase and Zesco’s adjustments based on the US Producer Price Index (PPI) at 2.4%, import costs are expected to rise further. The exchange rate against the US dollar, currently at N$17.90, also significantly impacts import expenses.
Delay in IPPs
Delays in implementing projects by Independent Power Producers (IPPs) have further exacerbated the situation. Although the energy market was opened to private sector participation in 2019, only 25 MW has been integrated so far, with an additional 40 MW expected in the near future. However, a planned 114 MW of IPP capacity remains stalled due to various regulatory and financial hurdles.
Visser pointed out that many IPPs focus on energy exports rather than supplying the domestic market, adding further strain to NamPower’s supply chain.
To tackle these financial challenges, NamPower is urging major municipalities and other stakeholders to engage in negotiations with IPPs to secure more affordable energy. In addition, the utility is advocating for a more structured and transparent tariff determination process that would enable sustainable cost recovery without sudden regulatory reversals.
As NamPower navigates this financial crisis, urgent intervention is needed to prevent further instability in Namibia's energy sector, which could lead to higher electricity costs and supply limitations for both businesses and households.
This was disclosed by Christo Visser, NamPower’s senior manager for electricity tariffs.
In addition to this setback, NamPower is dealing with a substantial write-off of N$157 million due to unpaid bills for the 2024 financial year. The total outstanding debt of nearly N$960 million underscores the utility’s struggle to collect revenue from its customers.
Visser emphasised that delayed payments, combined with a lack of financial support, are exerting additional pressure on NamPower's ability to fund its operations and infrastructure projects. He expressed concern that the unpaid N$960 million is placing the government in a difficult position, which he described as unfair.
NamPower also faces risks from fluctuations in river flow levels, particularly at the Ruacana hydroelectric plant, which provides 30% of Namibia's energy supply. Visser explained that a deviation of 100 GWh in river flow could result in a revenue impact of N$200 million, highlighting the risks of reliance on hydropower.
In addition, Namibia depends on energy imports from regional suppliers such as Eskom in South Africa and Zesco in Zambia. Visser noted that with Eskom recently securing a 12.7% tariff increase and Zesco’s adjustments based on the US Producer Price Index (PPI) at 2.4%, import costs are expected to rise further. The exchange rate against the US dollar, currently at N$17.90, also significantly impacts import expenses.
Delay in IPPs
Delays in implementing projects by Independent Power Producers (IPPs) have further exacerbated the situation. Although the energy market was opened to private sector participation in 2019, only 25 MW has been integrated so far, with an additional 40 MW expected in the near future. However, a planned 114 MW of IPP capacity remains stalled due to various regulatory and financial hurdles.
Visser pointed out that many IPPs focus on energy exports rather than supplying the domestic market, adding further strain to NamPower’s supply chain.
To tackle these financial challenges, NamPower is urging major municipalities and other stakeholders to engage in negotiations with IPPs to secure more affordable energy. In addition, the utility is advocating for a more structured and transparent tariff determination process that would enable sustainable cost recovery without sudden regulatory reversals.
As NamPower navigates this financial crisis, urgent intervention is needed to prevent further instability in Namibia's energy sector, which could lead to higher electricity costs and supply limitations for both businesses and households.
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