Electricity tariff increase cancelled

… opposition cries election ploy

Amid public pressure, the government has decided to make available N$365 million to subsidise electricity consumers for the 2024/25 financial year, effective from 1 July this year to 30 June 2025.

The move to cancel the planned tariff increase means consumers will continue paying the current average tariff of N$1,98 per kilowatt-hour, instead of the planned N$2,14 per kilowatt-hour until the end of June next year.

However, the opposition says the government’s decision to cancel the implementation of the 8% electricity tariff increase announced last week is an election ploy of the ruling party.

Electricity Control Board (ECB) chief executive Robert Kahimise yesterday said the decision comes after minister of mines and energy Tom Alweendo engaged the board to collectively consider consumers’ plight.

“In this regard, the government resolved to make approximately N$365 million available to subsidise electricity consumers for the 2024/25 financial year, effective 1 July 2024 to 30 June 2025,” Kahimise said.

He said the ECB will allow licensees to deviate from the tariff increase.

“Approximately N$221 million of the N$365 million has been set aside to assist NamPower to execute its mandate and to ensure the uninterrupted security of electricity supply.

“The remaining N$144 million will be utilised by the distribution utilities to lessen the impact of the electricity tariff on their customers for the said period,” Kahimise said.

He said setting tariffs to cover the full cost of utilities has multiple benefits as it creates a self-sustaining power sector, reducing reliance on government subsidies and allowing funds to be redirected to critical areas like education and healthcare.

He said financially viable utilities can access credit more easily, as seen with NamPower and some regional distributors and cost-reflective tariffs attract private investment in renewable energy, with around 23 independent power producers investing N$5 billion in Namibia.

Additionally, he said adequate tariffs enhance regional electricity trade, helping Namibia maintain stable supply agreements with neighbouring countries and avoid load-shedding.

“However, despite the benefits of cost-reflective tariffs as indicated above, reflecting the true cost of electricity in tariffs (especially given the high cost of imports) means the consumers bear the full cost of electricity supplied to them, which could result in affordability issues,” Kahimise said.

‘ELECTION PLOY’

Since the tariff increase announcement last week, the Popular Democratic Movement (PDM), along with social justice activists, have pushed for government intervention on the decision.

The PDM last week said electricity is a fundamental necessity and that the additional costs would be catastrophic for households already on the brink of economic collapse.

Yesterday, the party’s spokesperson, Hidipo Hamata, called the government’s decision to subsidise electricity costs for this year an election ploy.

“They are acting now, because they know this is an election year and they cannot afford to lose votes over electricity. Why are they asking the government to subsidise this year and not after the elections?

“It is clearly an election ploy. They must not play with the people of this country at all,” he said.