Erongo RED invests N$12m in rural electrification

Erongo Regional Electricity Distributor (Erongo RED) has invested a total of N$12 million in electrification of rural communities in Erongo region during the 2016/17 financial period.

 In the Daures constituency over 600 households were connected to the grid; 245 household at Okombahe; 158 households at Omatjete; 45 households at Otjohorongo; 112 households at Tubusis and 41 households at Anixab.

Real growth of 4.5 percent has been observed in the number of units of electricity sold which contributed to an increase of 14 percent of revenues amounting to N$1.1 billion for the reporting period.

Cost of sales increased by 18 percent to N$957.8 million given the annual tariff increase of NamPower of 16.7 percent over the 2015/16 financial year.

The company’s operating profit has decreased by 30 percent to N$51.1 million due to the reduction in gross profit from 17.6 percent to 14.7 percent.

The executive manager of finance and administration Freddie Vries stated that achieving balanced delivery on its obligations and responsibilities in an environment marked by strained economic circumstances is not a simple task.

“Some expenditures such as the special tariffs offered to vulnerable members of the community, significantly affect the company’s bottom line. Because Erongo RED operates in a regulated environment, which, for example, requires that the company pays a monthly surcharge to its shareholders, and because subsidies are a critical aspect of its business model, these expenditures need to be absorbed or ameliorated elsewhere,” he stated.