Namibia will introduce a three-year electricity pricing framework from the 2027 financial year, replacing the current annual tariff review process in a move aimed at providing greater price certainty for consumers and long-term investment confidence for businesses.
The Electricity Control Board (ECB) said the new Multi-Year Price Determination (MYPD) framework will establish a transparent rolling three-year tariff path, reducing the uncertainty associated with annual electricity price adjustments.
ECB Executive for Economic and Market Regulation Pinehas Mutota said the regulator is already piloting the framework with selected electricity licensees ahead of its full implementation.
“As for the three-year MYPD framework, we are currently piloting it with select licensees. The primary advantage for the consumer is long-term tariff predictability and a highly stable pricing path. Consumers will know exactly what their tariff trajectories look like over a rolling three-year horizon, making financial planning simple,” Mutota said.
He said the new pricing model would be supported by a performance-based regulatory framework that links tariff approvals to the operational efficiency of electricity distributors.
Under the new system, the ECB will continuously assess utilities against national performance benchmarks, with distributors that record high system losses or operational inefficiencies facing reductions in their allowable tariffs.
The approach marks a significant shift in electricity regulation by ensuring utilities, rather than consumers, bear the financial consequences of poor operational performance.
“Additionally, it introduces performance-based pricing controls. If a distributor exhibits high system losses or operational inefficiencies, they will be penalised through reductions in their allowable tariff formulations. This forces the industry to become inherently efficient, ensuring consumers get better service for the money they pay,” Mutota said.
The ECB said the multi-year pricing framework is intended to improve transparency, encourage greater operational efficiency across the electricity sector and provide households and businesses with greater certainty when planning their finances and investments.
