On Wednesday, Namibia’s Electricity Control Board (ECB) granted state utility NamPower a 9.53% electricity tariff increase after reviewing an application for a 13.2% bulk tariff hike.
The tariff increase will come into effect on July 1, 2015 increasing the rate from its current $0.097kWh to $0.11kWh, Nigerian news portal New Era reported.
Foibe Namene, CEO of ECB, stated: “This would suffice for NamPower to cover its allowed operating costs, keep the lights on and fulfil its financial obligations.”
According to Namene, NamPower’s 13.2% requested tariff increase makes provision for the year-on-year revenue requirement of NamPower, taking only actual costs and losses into account, media reported.
“Tariff increases mean a rise in the cost of living and production, and have a potential to jeopardise job creation and poverty alleviation. It is therefore important that the ECB, as the regulator, takes a long-term view and ensures that its decisions are made on the backdrop of tough conditions prevailing in the economy at all times,” Namene said.
According to Nameme, the granted tariff increase is still within the parameters of the country remaining regionally competitive and it is indeed cost-reflective.
“In terms of this Cabinet decision, the ECB has been granting NamPower real tariff increases from 2005 onwards to ensure that cost-reflective tariff levels were reached by 2011/2012 and subsequently sustained beyond that period,” Nameme added.
Namibia as energy importer
Namibia remains a net importer of electricity, importing 70% of its consumption from the southern African region, depending on the availability of water at the Ruacana Power Station, according to The New Era report.
Nameme said: “The substantial shortage of energy in the southern Africa region at this stage is putting pressure on energy tariffs not only in Namibia but in all of the countries in the SADC (Southern African Development Community) region. This situation will prevail until enough new generation capacity has been built.”
She continued that electricity tariffs in Namibia, just like in most SADC countries, would continue to rise until enough generation capacity is available.