Justicia ShipenaÂ
Once again, the government will cover millions to support NamPower’s tariff increase.
For the 2025/2026 financial year, it will cost N$283 million to ease the impact on consumers.
The Electricity Control Board (ECB) approved a revised tariff increase of 3.8% on Tuesday, raising the average bulk tariff from N$1.98 per kilowatt-hour (kWh) to N$2.06 per kWh.
This change will take effect on 1 July 2025 and will remain in place until 30 June 2026.
The government’s financial support covers 3.8% of the proposed tariff increase, helping to ease the impact of the initial 17.44% hike.
ECB CEO Robert Kahimise explained that balancing affordability with the long-term financial sustainability of NamPower is crucial.
“We understand the impact that tariff increases can have on consumers, but it is extremely important for the continued stability and functioning of our electricity supply system. The government’s financial support plays a key role in mitigating the full effects of the tariff adjustment,” he said.
Last year, the government allocated N$365 million to subsidise electricity consumers for the 2024/2025 financial year.
This subsidy ensured that consumers continued to pay the same tariffs as per the approved schedule.
The current tariff increase was initially requested to cover NamPower’s revenue needs, including costs for bulk electricity purchases, maintenance, and staff salaries.
After a thorough review, including stakeholder consultations, the ECB reduced the revenue requirement from N$8.8 billion to N$8.1 billion.
Kahimise stated that the increase is expected to have minimal impact on inflation and the prices of goods and services, which are well below the current inflation rate of 4.2%.
However, the adjustment may slightly affect Namibia’s GDP growth due to rising electricity costs.
NamPower also considered external factors, including the rising cost of electricity imports and the depreciation of the Namibian dollar.
The utility’s performance during the 2023/2024 period, which saw an over-recovery of N$963 million, helped reduce the overall revenue requirement.
The revised tariff will apply to NamPower’s bulk customers, including regional electricity distributors, local authorities, and large industrial customers like mines, according to the ECB.
ECB said distribution utilities will apply for their individual tariff adjustments, which will take effect on 1 July 2025.
The Katutura Residents Committee expressed its satisfaction with the reduced tariff increase. Initially, the committee strongly objected to the 17.44% hike, calling it inconsiderate during a time of financial hardship.
“We are happy that the 17.44% increase we objected to was not approved. It was a steep hike that we felt was unreasonable. Our stance remains that the recommendations we put forward must be seriously considered,” said Shaun Gariseb, the committee’s spokesperson.
The committee also highlighted the need for a more predictable approach to tariff increases.
“We strongly believe that a permanent solution must be found, as electricity tariffs can’t go up every year. At least every four years, there should be a review that ensures stability and predictability for consumers,” Gariseb added.
He also called for the adoption of a multi-year price determination mechanism.
“This approach would allow for better planning and stability for both the electricity providers and consumers alike,” he said.
