(RESERVED) Power strain: Electricity tariffs surge 61% in a decade

Electricity tariffs in Namibia have surged by 61% since 2015, piling pressure on households and businesses already grappling with rising costs of living and operating.The hikes, approved annually by the Electricity Control Board (ECB), reflect the sector’s struggle to balance soaring supply costs with affordability for end-users.For 2014/15, the ECB granted NamPower an effective average increase of 13.22%. To ease the impact, the then mines and energy ministry allocated N$150 million, supplemented by N$20 million from the National Energy Fund (NEF), to subsidise fuel costs at Van Eck and Anixas power stations.By July 2016, NamPower applied for a 31.24% hike. The ECB approved 16.71%, raising the average bulk tariff from N$1.28/kWh to N$1.49/kWh.In 2018/19, a requested 6.56% increase was trimmed to 5%, taking the tariff to N$1.69/kWh. The following year, NamPower applied for a decrease, and the ECB granted a 2.5% cut, lowering the average tariff to N$1.65/kWh.Tariffs remained flat in 2020/21 but rose again in 2021/22 by 2.92% to N$1.6982/kWh. A sharper increase came in 2022/23, when NamPower’s request for 12.78% was reduced to 7.30%, lifting tariffs to N$1.8222/kWh. Government provided N$100 million in relief through the NEF.Last year, NamPower sought 16.87% but was granted 8.97%, pushing tariffs to N$1.9856/kWh, with N$200 million in support from the Long-Run Marginal Cost (LRMC) fund.Despite these interventions, businesses and residents remain under strain.“Everyone here in Havana complains about how fast electricity units deplete,” said Mighana Shikongo (47), who runs a bar in the informal settlement. “My jackpot machines and freezers consume a lot of electricity, so it’s my biggest expense.”Tariff protestsIn June this year, the Affirmative Repositioning (AR) movement objected to the City of Windhoek’s proposed 4% increase, calling it premature and unjustified. AR Khomas chairperson Sem David accused the municipality of failing to provide data or transparency. The City has yet to respond to queries on tariff breakdowns.Government’s defenceUrban and rural development minister Sankwasa James Sankwasa defended the proposed increase, saying it aligned with NamPower’s 3.8% hike.“Unfortunately, electricity tariff adjustments cannot be stopped randomly,” he told parliament, stressing that generation, transmission and distribution costs drive pricing. He noted Namibia’s reliance on Eskom exposes it to South African increases.Introducing a tariff cap without subsidies, he warned, would jeopardise NamPower and local distributors.Sankwasa rejected claims that inefficiencies were behind the hikes. “The city’s electricity department is operating at only 60% of approved staff positions. That reflects efficiency despite limited resources,” he said.Regional comparisonWindhoek remains the cheapest among distributors at N$2.40 per unit, compared to Erongo at N$2.70, CENORED at N$2.50, and NORED at N$2.60. Regionally, South African cities charge significantly more — Cape Town at N$3, eThekwini at N$3, and Ekurhuleni at N$3.60.Subsidies for the vulnerableTo shield pensioners, the minister pointed to cross-subsidisation. “Registered pensioners currently pay just N$1.67 per kilowatt hour for the first 250 units per month, compared to the standard N$2.47. This makes basic electricity more affordable,” he said.nikanor@nmh-hub.com.na

(RESERVED) Power strain: Electricity tariffs surge 61% in a decade

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(RESERVED) Power strain: Electricity tariffs surge 61% in a decade

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