ECB explores private power as govt says ‘no’

The Electricity Control Board (ECB) is pushing ahead with plans to develop a regulatory framework for independent transmission companies (ITCs), despite mines and energy minister Modestus Amutse telling NamPower that government does not support their creation.

ITCs are privately owned entities licensed to build, own or operate high-voltage infrastructure that carries electricity from power producers to substations and other parts of the national grid.

Unlike electricity generators, ITCs do not necessarily produce power themselves, but provide the infrastructure needed to move electricity, recovering their investment through regulated transmission or wheeling charges.

Under such a model, private capital can be used to develop transmission lines alongside infrastructure owned by the national utility, while regulatory rules determine tariffs, grid access, system operation and how independent operators interact with the national grid.

The ITC issue stems from BW Kudu's application to build and operate its own 400 kV electricity transmission infrastructure from the proposed Kudu gas-to-power station near Lüderitz to NamPower's Obib substation.

BW Kudu's proposal would introduce privately owned transmission infrastructure into a sector in which NamPower is currently Namibia's only transmission licensee.

The company's transmission licence application was advertised on 22 May 2024, prompting NamPower to object on 21 June 2024, before BW Kudu responded on 12 July 2024.

The matter subsequently went before an ECB public hearing in 2025, where NamPower argued that allowing another transmission operator would affect its existing role as the country's sole transmission licensee, and raised questions over grid operation, planning, security and control.

BW Kudu maintained that the Electricity Act did not prohibit another entity from obtaining a transmission licence and sought approval for the infrastructure needed to connect its proposed Kudu power station to the national grid.

The issue before the ECB was whether the existing legal and regulatory framework was sufficient to accommodate BW Kudu's proposed private transmission infrastructure, or whether an ITC framework had to be established first.

‘Explicit’ policy decision

NamPower managing director Simson Kahenge Haulofu subsequently wrote to Amutse on 20 January, raising NamPower's concerns about BW Kudu's licence implications for the structure, governance and future development of Namibia's electricity supply industry.

Amutse's response, dated 22 June, acknowledged the strategic importance of the issues raised by NamPower and said government did not support ITCs.

The minister said Namibia's transmission network remained a strategic national asset fundamental to the security, stability and long-term development of the electricity sector, while government had entrusted NamPower with responsibility for developing, operating, maintaining and expanding the national transmission network.

“The ministry wishes to state unequivocally that strategic transmission infrastructure constitutes critical national infrastructure and forms part of Namibia's sovereign energy assets,” Amutse wrote.

He added that the government cannot support the fragmentation, privatisation or transfer of ownership and control of strategic transmission assets outside the national transmission framework established under existing legislation, policy, and regulatory instruments.

“Accordingly, the government's position is that the creation of independent transmission companies (ITCs) in Namibia is not supported,” Amutse wrote.

He said privately owned transmission entities operating outside the national transmission framework would be inconsistent with the mandate currently entrusted to NamPower and contrary to the government's objective of maintaining an integrated, coordinated and secure national transmission system.

Amutse added that proposals seeking to alter the ownership, operation, control or governance of nationally important transmission infrastructure could not be addressed solely through individual licence applications, as they carry policy, economic, security-of-supply and governance implications.

Such matters, he said, would require “deliberate government consideration, broad stakeholder consultation, and an explicit government policy decision".

Amutse said the ministry would engage with relevant institutions to ensure that decisions affecting the structure of the national transmission network remained aligned with government policy, national energy security objectives, and the long-term interests of Namibia's electricity supply industry.

On 31 July, just over five weeks after Amutse's letter, the ECB issued a request for proposals for consultants to develop a “comprehensive and implementable regulatory framework” for ITCs in Namibia with a maximum implementation period of eight months.

The ECB says Namibia is transitioning from the single-buyer model to a modified single-buyer model, “enabling private participation in transmission infrastructure under licence conditions”.

ECB chief executive Robert Kahimise told Namibian Sun yesterday that he did not believe the regulator’s tender contradicted the minister’s position.

“We make recommendations to the minister,” he said, before asking for questions to be sent by email. He had not responded by the time of going to print.

Amutse asked for questions to be sent by text message but had not responded by the time of publication.

Rise in applications

The ECB said there has been an increase in transmission licence applications, including proposals involving cross-border transfers into the Southern African Power Pool.

“ECB therefore requires a comprehensive market and regulatory framework governing the establishment, licensing, operation and oversight of independent transmission companies (ITCs),” the tender states.

The proposed framework would regulate the establishment and unbundling of ITCs; licensing; governance; ring-fencing; transmission planning; network and system operations; non-discriminatory grid access; interconnection; revenue and tariff setting; performance; compliance; and regulatory oversight.

It must also align with the Electricity Act, national electricity and energy policies, ECB regulatory instruments, the Modified Single Buyer Market Rules, the Southern African Power Pool requirements, and the SADC Energy Protocol.

The tender requires consultants to examine different transmission models, including maintaining the existing arrangement, ring-fencing transmission within an existing entity, establishing a fully independent licensed transmission company and allowing multiple licensed ITCs where applicable.

Consultants will assess the implications of different models for transmission investment, tariffs, reliability, competition, affordability, and regional electricity trade, while also considering connection and wheeling arrangements, congestion, curtailment, and access to transmission infrastructure.

The ECB tender documents do not say whether government changed its position after Amutse's 22 June letter or whether the regulator received further policy direction before issuing the ITC framework tender on 31 July.