ECB Weighs In On NamPower’s Debt Recovery Plan

By:Nghiinomenwa-vali Erastus
The country’s electricity regulator has warned that, in the future, no debt recovery plan should compromise life-saving services and disturb the energy supply to those in good standing.
This is in response to NamPower’s debt recovery plan that involved targeted blackouts.
In a statement released last Friday, the Electricity Control Board (ECB) Chief Executive Officer Robert Kahimise warned that Nampower’s debt recovery plan has caused, and will cause if continued, immeasurable damage to the economy, and will interrupt critical life-saving services such as medical services.
Kahimise said the interruption negatively impacts economic activities and may increase electricity consumers’ inability to settle their energy bill.
He also indicated that the regulator sympathises with the customers that have no electricity debts but were in the dark as NamPower and the distributors failed to implement a targeted electricity disconnection.
“The ECB shares the plight of those customers who are in good standing or who are on prepayment and who were unfairly affected by the measures taken by NamPower,”Kahimise said.
He went on to warn that “in future, any debt recovery plan by a licensee that compromises life-saving services and interruption to customers in good standing will not be supported by ECB”.
The ECB boss revealed that the regulator has engaged all the affected electricity distribution licensees as per their licensing conditions in terms of service delivery, safety and settling of NamPower’s outstanding debts.
NamPower rolled out its debt recovery plan to collect N$1 billion in outstanding electricity bills by cutting off electricity supply to the defaulting Northern Regional Electricity Distributor (Nored) on 5 June 2023 as approved by its board of directors.
As a result, all electricity-consuming residents under Nored experienced at least 2 hours of power outage between 17h00 and 21h00 on 5 June 2023.
Cabinet intervened through the Ministry of Finance and Public Enterprises, leading to NamPower announcing on 12 June 2023 that it would suspend its plan.
However, the suspension is only till the end of August 2023, as the government finds solutions to the defaulting local authorities and for the power utility to collect its debts.
The ECB said NamPower’s debt pile-up was caused by NamPower’s reluctance or failure to strictly implement its own credit control policies, as well as the distribution licensees failing to fully settle their NamPower invoices on time over a long period of time.
The regulator highlighted that the status quo poses a risk to the country’s electricity supply, as NamPower may find itself in a position where it is not able to buy or generate sufficient electricity to meet the country’s demand.
“The benefit that NamPower (and Namibia) enjoy through NamPower’s credit rating should not be underestimated,” Kahimise said, while applauding the government intervention that temporarily halted NamPower’s plan hoping that a lasting solution will be reached by the end of August.
Despite the government’s temporary intervention, Kahimise asked all electricity consumers to settle theirbills and advised all licensed distributors to implement their strict debt collecting policies.
“We also urge distribution licensee to implement strict credit control policies so that electricity supply to non-paying customers is immediately discontinued to ensure prompt payment by all customers,” he said.
Kahimise added that the revenue collected from the strict credit policies should be paid over to NmPower and not be used for non-electricity purposes by the distribution licensees.
He said the ECB-approved tariffs provide for sufficient revenue for distribution licensees to settle their NamPower bills and to ensure safe and reliable electricity supply to end users.
“The licensees have an obligation to recover electricity payment from their respective customers to ensure settlement of NamPower’s bills.”
Kahimise assured to engage both NamPower and the distribution licensees prior to the next tariff review to ensure that they meet cost structure optimisations and operational efficiency targets.