Namibia forges ahead with electricity distribution reform

The trajectory of the future of electricity distribution industry reform has been laid out following a successful summit in November last year.

According to Electricity Control Board (ECB) technical regulation manager Lameka Amuanyena, the regulator is committed to seeing the establishment of the two remaining regional electricity distributors to join the existing Erongo RED, Cenored and Nored, making five REDs in all.

NamPower will gradually exit the distribution industry in Namibia to focus on generation, transmission and trading, he said.

Modifications for the establishment of a new central RED and the southern electricity distribution RED have been agreed upon, he said.

All RED’s will move to 66 kV lines, and the NamCode corporate governance approach will be enforced by independent, non-executive board members.



Central overhaul

The new central RED will encompass the City of Windhoek, the Khomas Regional Council and NamPower.

Each of these entities will become shareholders, although the ECB noted that the practice of paying dividends to shareholders will be phased out for all REDs in the country. Instead, each shareholder will receive income from surcharges in the future.

Current distributors in central Namibia who will not be amalgamated into the central RED, including any local authorities, regional councils and NamPower distribution in the Omaheke Region, will be absorbed by Cenored, Amuanyena explained.



Southern outlay

The ECB is also committed to the establishment of the brand-new //Au-Ob RED for the south of Namibia.

The //Au-Ob name was selected from the river of the same name that flows through the Hardap and //Karas regions.

Despite some resistance from political parties in charge of many of the settlements, local authorities and regional councils in the south, advertisements for top leadership positions in the new southern RED have already been placed in local newspapers.

At last year's summit, Julian Engelbrecht, the acting chief regional officer for the Hardap Regional Council, explained that the modifications made to the previous SORED concept, and the establishment of what will be known as //Au-Ob RED, will exclude NamPower as a shareholder.

The proposed shareholding makes provision for 19 shareholders, drawn from regional councils and local authorities in the south of Namibia.

As of the end of 2023, 11 shareholders had already signed up for participation. These include the Hardap and //Karas regional councils, the Keetmanshoop municipality, Karasburg and Rehoboth, as well as the Bethanie, Gibeon, Gochas, Matlahöhe, Stampriet and Koës village councils.



Support pledged

NamPower is owed more than N$537 million by various local authorities and regional councils in the south.

It is anticipated that the central government will assume this debt to facilitate the establishment of the new RED. Additionally, the mines and energy ministry is expected to inject N$90 million as start-up capital, with an additional N$30 million allocated over the following six years to support the fledgling organisation.

The new RED will reduce the cost of supply by participating in the modified single buyer model, enabling it to purchase directly from select independent power producers.