Nored defends proposed 7.7% proposed tariff increase
Northern Regional Electricity Distributor (Nored) says its proposed average 7.7% electricity tariff increase is based on rising operational costs, growing infrastructure demands and the need to maintain reliable energy supply.
Speaking at a recent stakeholder consultative meeting for Oshana, Ohangwena and Oshikoto regions on Nored's proposed tariff submission to the Electricity Control Board (ECB) for the 2025/2026 financial year, acting CEO Toivo Shovaleka highlighted the urgent need to balance financial viability with service delivery expectations.
The utility is proposing a 3.1% increase specifically for domestic and residential customers.
Shovaleka said the submission is driven by several key cost pressures, including a 3.8% increase in the average bulk supply tariff, a national inflation rate of 4.2%, and a projected under-recovery of N$36.1 million if tariffs remain unchanged.
“Last year, the national utility received an 8% increase. Nored applied for 7.7% but was granted 6.6%. We are hopeful that a subsidy may be considered this year to cushion the impact on consumers,” he explained.
Earlier this year, Namibia Power Corporation (NamPower) requested a 14.59% increase in electricity tariffs from the ECB for the 2024/25 financial year.
Cost of being plugged in
During the consultative meeting, Shovaleka defended the tariff application, saying that the overall 7.7% tariff increase submitted for ECB approval is below NamPower’s recently announced 8% tariff adjustment.
He added that additional cost drivers include expanded rural electrification projects aligned with the government’s universal access goals, which have resulted in higher maintenance and operational expenses.
Several budget items have seen significant rises, he said.
"Safety, health and environment costs are up by 12.5%. Network maintenance increased by 8.6%, vehicle maintenance is up by 9%, revenue protection efforts surged by 66.6%, public and customer education increased by 9.3% and transmission station upgrades are set to cost N$106 million, representing 71% of the total capital expenditure budget,” Shovaleka noted.
He added that the proposed increase is part of a broader strategy to modernise operations through digital transformation and non-wire alternatives, enabling the utility to reach more customers without relying solely on large-scale capital investments.
“Our challenge is to do more with less,” he explained, noting the delicate balance between addressing immediate energy demands and planning for long-term sustainability.
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Speaking at a recent stakeholder consultative meeting for Oshana, Ohangwena and Oshikoto regions on Nored's proposed tariff submission to the Electricity Control Board (ECB) for the 2025/2026 financial year, acting CEO Toivo Shovaleka highlighted the urgent need to balance financial viability with service delivery expectations.
The utility is proposing a 3.1% increase specifically for domestic and residential customers.
Shovaleka said the submission is driven by several key cost pressures, including a 3.8% increase in the average bulk supply tariff, a national inflation rate of 4.2%, and a projected under-recovery of N$36.1 million if tariffs remain unchanged.
“Last year, the national utility received an 8% increase. Nored applied for 7.7% but was granted 6.6%. We are hopeful that a subsidy may be considered this year to cushion the impact on consumers,” he explained.
Earlier this year, Namibia Power Corporation (NamPower) requested a 14.59% increase in electricity tariffs from the ECB for the 2024/25 financial year.
Cost of being plugged in
During the consultative meeting, Shovaleka defended the tariff application, saying that the overall 7.7% tariff increase submitted for ECB approval is below NamPower’s recently announced 8% tariff adjustment.
He added that additional cost drivers include expanded rural electrification projects aligned with the government’s universal access goals, which have resulted in higher maintenance and operational expenses.
Several budget items have seen significant rises, he said.
"Safety, health and environment costs are up by 12.5%. Network maintenance increased by 8.6%, vehicle maintenance is up by 9%, revenue protection efforts surged by 66.6%, public and customer education increased by 9.3% and transmission station upgrades are set to cost N$106 million, representing 71% of the total capital expenditure budget,” Shovaleka noted.
He added that the proposed increase is part of a broader strategy to modernise operations through digital transformation and non-wire alternatives, enabling the utility to reach more customers without relying solely on large-scale capital investments.
“Our challenge is to do more with less,” he explained, noting the delicate balance between addressing immediate energy demands and planning for long-term sustainability.
- [email protected]
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