The national power utility has announced it would suspend electricity supply to defaulting customers from 5 June – unless these customers settle their full outstanding amounts before this date.
Namibia Power Corporation Limited (NamPower) spokesperson Tangeni Kambangula yesterday in a statement said this is because the power utility’s customers owe it over a billion Namibia dollar.
“The situation has concerned NamPower for a considerable time, and we have had several interventions with various stakeholders in this regard.
“If this state is left without our further action, it would detrimentally affect our duty to supply electricity to the entire country on a sustainable basis,” she said.
The Namibian recently reported that NamPower was unable to pay interest on its loans last year and risks the possibility of lenders demanding an immediate repayment of N$517 million.
Its operations were running at a loss of N$2,3 billion, meaning the N$6,5 billion the utility collected from selling electricity was not enough to cover its expenses.
NamPower’s defaulting clients include the Northern Regional Electricity Distributor (Nored), which distributes power to seven northern and north-eastern regions, and the Central-Northern Regional Electricity Distributor (Cenored), which distributes power to the Otjozondjupa and Kunene regions.
Meanwhile, the chief executive officer of Nored, Fillemon Nakashole, this week said the company is in the process of discussing the matter, and all queries regarding the planned power cuts would be answered by next week.
Cenored spokesperson Charlie Matengu confirmed that the company is indeed in arrears with NamPower.
“We are supposed to execute our payments on the 25th of every month, but we end up making payments late on the 30th of every month. This has affected our payment plan, which has now accumulated a lot of interest.
“However, I can say that our account with NamPower is current. We need to see how we can resolve the matter. We cannot shy away from it,” he said.
Matengu said only Cenored Okahandja joint venture (JV) is likely to suffer power outages should the distributor fail to honour its payments on time.
Cenored Okahandja JV is a joint venture between Cenored and the Okahandja municipality in which the Okahandja municipality is the largest shareholder, with 60%, while Cenored owns 40%.
The joint venture came into effect in 2015 when the Okahandja municipality owed NamPower large amounts of money due to the non-payment of services provided to the municipality, threatening power cuts to the town.
Cenored then came to the municipality’s rescue by entering into the joint venture.
“We have scheduled a meeting with NamPower for tomorrow to see how we can arrange a repayment plan.
“The outcome of this meeting will determine the way forward on how we can rescue our affected customers, and also to see if the Okahandja municipality would still be part of the joint venture, or whether it would bow out of the joint venture,” Matengu said.
He, however, could not tell how much Cenored owes NamPower, saying he was not in a position to reveal such information.
NamPower directly supplies the rest of the local authorities at southern towns.
Acting Lüderitz chief executive officer Otto Shipanga in a media statement yesterday said NamPower has erred by including them.
“Lüderitz Town Council has a standing power supply agreement with NamPower, which Lüderitz Town Council is committed to honouring,” the statement reads.
Shipanga said the council owes a manageable amount and would endeavour to meet the deadline as set by the power utility, and would not be affected by power cuts.
UNEMPLOYMENT TO BLAME
Most of the local authorities in the Hardap and //Kharas regions, including the //Kharas Regional Council, would be affected by power cuts.
Acting chief regional officer of the //Kharas Regional Council Bendictus Diergaadt this week said the council is currently verifying the amount owed to NamPower.
Diergaardt said the council is planning to make a payment to NamPower tomorrow after verifying the debt amount.
“The second step, when we establish the outstanding amounts that we need to negotiate, is how we will settle those amounts, because we don’t have a lot of money. Depending on the amount, we will see,” he said.
Diergaardt said the unemployed marginalised communities at settlements are part of the reason for the council’s negative account with NamPower.
“It is difficult for them to pay. We are also trying to negotiate with them to see if they can pay the accounts,” he said.
Diergaardt said the government’s subsidy has decreased over the last three financial years.
The government’s budget books show that the regional council in the 2020/21 financial year received N$36,4 million, and the following year N$42,7 million.
In the last financial year the council received N$39,8 million.
“So that played a role in the collection,” Diergaardt said.
Additionally, he said the region has outdated electricity meters that need to be replaced and maintained.
The regional council is looking into other revenue streams to service their debts, he said.
The Mariental municipality will table the matter at its council meeting next week.
The Brakwater and Groot-Aub areas, which obtain their power from the City of Windhoek, are also affected.
City of Windhoek spokesperson Harold Akwenye yesterday confirmed that the municipality owes NamPower N$500 000.
“All our service providers (NamWater and NamPower) are paid to date. The outstanding N$500 000 is attributed to the additional boreholes that we created in order to pump and supply Groot Aub and Mix settlements with sustainable water.
“Our finance department has made payment arrangements to have the outstanding balance settled,” he said.
Akwenye said the municipality does not struggle to pay its service providers.
Meanwhile, NamPower holds a 33,33% equity interest in Nored, which also made a loss of N$12 million in the 2022 financial year.
Nored’s sales were at N$1,11 billion, while electricity expenses came in at N$1,12 billion.
NamPower holds a 45% equity interest in Cenored, which returned a profit of N$31,2 million in the 2022 financial year.
The City of Windhoek remains the power utility’s biggest customer, buying electricity (21%) worth N$1,4 billion annually.