Electricity prices are due to rise by 17.2% and the increases are likely to keep coming. Chief Executive Officer of the Electricity Control Board (ECB) Siseho Simasiku said last week that the board has granted Nampower permission to increase electricity tariffs by a whopping 17.2%.

Namibian consumers will have to cough up those dollars, “or else choose to be in the dark,” he said. Tariffs are to increase above inflation until 2019/2020 as most planned new power generation projects will only start operating after 2017, he said. “You the consumer make sure that Nampower can operate through tariffs,” Simasiku said, although he admitted that up to 60% of the Namibian population does not use or pay for any electricity at all. Many more fall into the poorest category of people connected, but unable to afford electricity, with the majority of Namibians consuming as little as 200 kilowatt/hours per year. According to Simasiku the ECB is still working on a pro-poor tariff methodology.
This latest increase is approved for the 2012/2013 financial year and Simasiku explained why it was less than the 25% that Nampower had applied for. He said that although the ECB supported Nampower’s need to meet costs and remain cost reflective, the 17.2% increase was awarded after the board analysed Nampower’s submission and took into consideration the needs of the government, end-consumers and the economy at large. He noted that Nampower is pursuing various generation and transmission projects at present and is under obligation to generate electricity at high costs. He also spoke about the 2011 delay in tariff increases due to auditing of infrastructure that year.
According to Simasiku the problem is not confined to Namibia “the whole region is affected. There is no country in southern Africa which is self-sufficient,” he said. Just because countries trade in electricity, “that does not mean these countries have enough power for themselves or a surplus,” he argued and, “it is a very unstable situation. The region has no power. South Africa is in huge need of power now.”  A Cabinet directive that Nampower tariffs should have been cost-reflective already was extended to the 2011/2012 financial year after government aspirations for Namibia to generate 75% of energy supply and 100% of peak demand by 2010 fell flat. According to Simasiku, “it was a wise policy, but how are you going to achieve that was not an issue that was addressed. Nampower had its plan to bear the lowest costs and so they looked to imports. If plans were done in a proper way, with government support, but it wasn’t done,” he explained.
Instead Namibia faces the end of the contract with Zimbabwe’s ZESA power utility in 2014 which will leave a 150 mega watt gap in local supply. Currently “we still import between 50% and 70% of the energy we use,” Simasiku confirmed.