'Peanuts' from Nored
With no financial statements since 2014, there are calls for a probe into the finances of Nored.
Local authority CEOs have accused Nored of a lack of transparency, saying it makes a fortune from electricity unit sales, while councils only receive peanuts.
The CEOs, who spoke on condition of anonymity, suggested that Nored's affairs be investigated, because it has not produced annual reports with financial statements since 2013/14, despite holding annual general meetings (AGMs).
They argue Nored is making millions from the communities in which they operate, at the expense of local authorities who service the land and build the necessary infrastructure.
They feel that the local authorities' 33% share in Nored, and what they benefit financially, “does not make sense”. “Annual reports are key because we are stakeholders in Nored and we have to go through them and also see whether the money from the public is used in their interest,” a local authority CEO said. “Nored is growing every year, while you find local authorities sitting with high debts, which they cannot pay off. Some local authorities are renting offices while at the same time Nored is buying expensive cars and constructing state-of-the-art buildings. The question is: Where do they get the money from?”
Nored was established in 2001 as the country's first regional electricity distributor (RED).
It distributes electricity to thousands of consumers in the Oshana, Ohangwena, Omusati, Oshikoto, Zambezi and two Kavango regions.
This is after cabinet in 2000 approved the initiative to create REDs to distribute and supply electricity, through economies of scale, by pooling together human and operational capital resources.
The ultimate goal is to stabilise electricity prices and ensure reasonable, affordable and cost-effective tariffs for electricity consumers.
Namibia was divided into five energy regions, to be serviced by five REDs. However, only three of them are operational, namely Nored, Cenored and Erongo RED.
Namibian Sun is reliably informed that during Nored AGMs, stakeholders are only taken through a presentation.
Attempts to get copies of Nored's recent financial statements proved futile, as the links on the company's website do not open. Meanwhile, Erongo RED and Cenored's annual reports, up to 2017, are accessible on their websites.
Since last Thursday, Namibian Sun has been waiting for a response from Nored spokesperson Simon Lukas, but no feedback was forthcoming at the time of going to print.
Namibian Sun had asked why Nored has not presented annual financial statements and reports for the 2015, 2016 and 2017 financial years, and why no profit or losses were declared for those years.
Nored was also asked how many customers are currently on its grid and whether it is aware of stakeholder concerns. During an earlier interview with Nored CEO Fillemon Nakashole at Rundu, he indicated the company is not profit-driven, but simply provides electricity. Nored recorded N$49 million profit after tax in 2013/14 financial year, under former CEO Gotlieb Amanyanga. When asked at the time about local authorities being unhappy with Nored and its affairs, as they are demanding more dividends, Nakashole said: “For you to have the maximum benefit in terms of surcharges, councils should not service the land and leave it unoccupied. As you service the land, try to get people to buy the land and get investors in and that will increase your cash flow, the money you receive monthly and it also increases your balance sheet.”
Nakashole also used the opportunity to praise the Omusati regional council, saying with the dividends they receive from Nored, they service settlements, which increases their assets, meaning more dividends.
According to the 2013/14 Nored annual report a total of N$15.4 million in surcharges was paid to local authorities. However, this was a drop from the 2012/13 financial year, when N$16 million was paid.
The CEOs, who spoke on condition of anonymity, suggested that Nored's affairs be investigated, because it has not produced annual reports with financial statements since 2013/14, despite holding annual general meetings (AGMs).
They argue Nored is making millions from the communities in which they operate, at the expense of local authorities who service the land and build the necessary infrastructure.
They feel that the local authorities' 33% share in Nored, and what they benefit financially, “does not make sense”. “Annual reports are key because we are stakeholders in Nored and we have to go through them and also see whether the money from the public is used in their interest,” a local authority CEO said. “Nored is growing every year, while you find local authorities sitting with high debts, which they cannot pay off. Some local authorities are renting offices while at the same time Nored is buying expensive cars and constructing state-of-the-art buildings. The question is: Where do they get the money from?”
Nored was established in 2001 as the country's first regional electricity distributor (RED).
It distributes electricity to thousands of consumers in the Oshana, Ohangwena, Omusati, Oshikoto, Zambezi and two Kavango regions.
This is after cabinet in 2000 approved the initiative to create REDs to distribute and supply electricity, through economies of scale, by pooling together human and operational capital resources.
The ultimate goal is to stabilise electricity prices and ensure reasonable, affordable and cost-effective tariffs for electricity consumers.
Namibia was divided into five energy regions, to be serviced by five REDs. However, only three of them are operational, namely Nored, Cenored and Erongo RED.
Namibian Sun is reliably informed that during Nored AGMs, stakeholders are only taken through a presentation.
Attempts to get copies of Nored's recent financial statements proved futile, as the links on the company's website do not open. Meanwhile, Erongo RED and Cenored's annual reports, up to 2017, are accessible on their websites.
Since last Thursday, Namibian Sun has been waiting for a response from Nored spokesperson Simon Lukas, but no feedback was forthcoming at the time of going to print.
Namibian Sun had asked why Nored has not presented annual financial statements and reports for the 2015, 2016 and 2017 financial years, and why no profit or losses were declared for those years.
Nored was also asked how many customers are currently on its grid and whether it is aware of stakeholder concerns. During an earlier interview with Nored CEO Fillemon Nakashole at Rundu, he indicated the company is not profit-driven, but simply provides electricity. Nored recorded N$49 million profit after tax in 2013/14 financial year, under former CEO Gotlieb Amanyanga. When asked at the time about local authorities being unhappy with Nored and its affairs, as they are demanding more dividends, Nakashole said: “For you to have the maximum benefit in terms of surcharges, councils should not service the land and leave it unoccupied. As you service the land, try to get people to buy the land and get investors in and that will increase your cash flow, the money you receive monthly and it also increases your balance sheet.”
Nakashole also used the opportunity to praise the Omusati regional council, saying with the dividends they receive from Nored, they service settlements, which increases their assets, meaning more dividends.
According to the 2013/14 Nored annual report a total of N$15.4 million in surcharges was paid to local authorities. However, this was a drop from the 2012/13 financial year, when N$16 million was paid.
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