Farmers resist proposed 17% power hike

The Namibia Agricultural Union (NAU) is strongly opposing the Namibia Power Corporation (NamPower)’s request for a 17.44% increase in bulk electricity tariffs for the 2025/26 year, saying it will put unnecessary strain on its members.

According to the union’s latest newsletter released on Friday, NamPower presented its annual submission for the adjustment of bulk electricity tariffs for the 2025/26 year to the Electricity Control Board (ECB) for approval on 5 and 7 March.

NamPower managing director (MD) Simson Haulofu says different cost drivers have impacted different components of NamPower’s total cost.

“The fixed operating costs, representing 16% of total expenses and 1.5% of the tariff application, are escalated with Namibian inflation and have been increased by 4.1% for this tariff application.

“In contrast, the biggest expense, which is energy procurement, is influenced by a combination of factors, including some factors beyond Namibian inflation.

“For example, the cost of energy purchased from Eskom will increase by 12.75% in line with the rate approved by the National Energy Regulator of South Africa,” he says.

The ECB is set to consider NamPower’s submission and rule on a tariff award by 30 April.

“Based on this approved NamPower bulk tariff, other electricity suppliers, such as the regional electricity distributors and local authorities, will also have to submit applications for electricity tariff adjustments (in this range) to the ECB for approval,” the NAU says.

The farmers’ union says the tariff increase NamPower is requesting is approximately three times the current inflation rate of around 6%.

“This will raise the current rate of 198.56c/kWh to 233.18c/kWh,” the farmers’ union says.

NamPower, however, says its application had been prepared in accordance with the approved tariff methodology, which is designed to achieve key objectives such as cost-reflective pricing and the financial sustainability of NamPower.

“It should be noted that the 8% increase approved last year was ultimately withdrawn and replaced with a subsidy, which is not carried forward into future years.

“Had the originally approved tariff been implemented, all else being equal, NamPower would be applying for a tariff increase of 8.7% for financial year 2026,” Haulofu says.

The power utility says the approximately N$1 billion in outstanding debts from consumers is not part of the tariff increase.

“NamPower is owed approximately N$1.7 billion, of which almost N$1 billion is overdue.

“As much as the growing amount of outstanding debt is a major concern for NamPower, we do not find it appropriate to penalise paying customers on account of those who do not honour their obligations,” the MD says, adding that stakeholder engagements are ongoing in an attempt to recover the outstanding amounts.

Furthermore, NamPower gave an assurance that Namibia is not at risk of power shortages and subsequent load-shedding in the foreseeable future.

“Given the current state of the economy, the high unemployment rate, and the challenges the farming sector is facing after the previous poor rainfall seasons, the NAU, on behalf of its members, has raised serious objections to this excessively large increase.

“We believe and trust that the ECB will carefully consider the state of the country’s economy and the concerns of stakeholders and approve a responsible electricity tariff for implementation on 1 July 2025,” the union says.

– email: matthew@namibian.com.na