ECB approves 3.8% hike, rejects NamPower’s 17.44% request
NamPower worried about cash flow
ECB CEO Robert Kahimise emphasised the regulator's role in protecting broader stakeholder interests.
The Electricity Control Board (ECB) has approved a bulk tariff increase of just 3.8%, well below the 17.44% requested by NamPower for the 2025/26 financial year.
The hike will raise the cost of electricity from N$1.98 per kWh to N$2.06 per kWh.
The decision has sparked criticism, with some questioning the relevance of the tariff application process, noting that NamPower has never been granted the increase it requests.
NamPower cited its financial challenges as the primary reason for the proposed 17.44% tariff hike.
The utility reported credit losses of N$157 million for the 2024 financial year and continues to struggle with a growing debt burden, now nearing N$1 billion.
However, the ECB explained that it had to consider affordability and apply its standard review methodology. As a result, it approved a smaller 3.8% increase, which will be subsidised by N$283 million from the Namibian government, NamPower’s main shareholder.
Operational hurdles
Christo Visser, NamPower’s senior manager for electricity pricing and financial modelling, defended the proposed increase, saying it was essential to address rising energy supply costs, inflation and infrastructure development.
"One hundred and fifty-seven million was impaired in 2024, and our total outstanding debt has now reached nearly N$1 billion. This is a huge financial burden that we can’t recover directly through tariffs, and it puts us at great risk,” he said.
He also warned of serious operational challenges if the proposed tariff was not approved. “This debt, which has been unpaid for extended periods, is causing significant cash flow problems. We can’t continue to operate like this without a tariff adjustment,” he added.
Addressing the concerns around the relevance of the tariff application, ECB CEO Robert Kahimise emphasised the regulator's role in protecting broader stakeholder interests.
“When an application comes here, we balance that interest against all the other stakeholders. Where the applicant's projected forecast risk is ‘X’, we might argue it’s not X, it’s Y, and that reduces the requested costs,” he explained.
The hike will raise the cost of electricity from N$1.98 per kWh to N$2.06 per kWh.
The decision has sparked criticism, with some questioning the relevance of the tariff application process, noting that NamPower has never been granted the increase it requests.
NamPower cited its financial challenges as the primary reason for the proposed 17.44% tariff hike.
The utility reported credit losses of N$157 million for the 2024 financial year and continues to struggle with a growing debt burden, now nearing N$1 billion.
However, the ECB explained that it had to consider affordability and apply its standard review methodology. As a result, it approved a smaller 3.8% increase, which will be subsidised by N$283 million from the Namibian government, NamPower’s main shareholder.
Operational hurdles
Christo Visser, NamPower’s senior manager for electricity pricing and financial modelling, defended the proposed increase, saying it was essential to address rising energy supply costs, inflation and infrastructure development.
"One hundred and fifty-seven million was impaired in 2024, and our total outstanding debt has now reached nearly N$1 billion. This is a huge financial burden that we can’t recover directly through tariffs, and it puts us at great risk,” he said.
He also warned of serious operational challenges if the proposed tariff was not approved. “This debt, which has been unpaid for extended periods, is causing significant cash flow problems. We can’t continue to operate like this without a tariff adjustment,” he added.
Addressing the concerns around the relevance of the tariff application, ECB CEO Robert Kahimise emphasised the regulator's role in protecting broader stakeholder interests.
“When an application comes here, we balance that interest against all the other stakeholders. Where the applicant's projected forecast risk is ‘X’, we might argue it’s not X, it’s Y, and that reduces the requested costs,” he explained.
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