Members of Parliament (MPs) have recommended that the administrative governance of Regional Electricity Distributors (REDs) in Namibia be recognised as State-Owned Enterprises (SOEs).
This comes in response to inefficiencies experienced under the current operations under the Companies Act. The MPs believe that there is lack of legislation to manage the REDs.
The recommendation is contained in a joint report by the Parliamentary Standing Committee on Natural Resources and Economic Administration, led by Tjekero Tweya and Natangwe Ithete, which acknowledges the noble intention behind the creation of REDs by the government, but highlights that some, like the Northern Regions Electricity Distributor (NORED), have fallen short of expectations.
“NORED cannot meet the demands for electricity in the north. Therefore, discussions need to happen to rectify the issues at NORED, and as such a small Committee was constituted to unpack the challenges at NORED,” said the report compiled following a workshop on maximising the potential of mining and energy sectors, held in May 2023.
NORED is known to operate under strain financial efficiency, maladministration and constant electricity blackouts.
Last week, the NORED board announced the suspension of its Executive Officer Fillemon Nakashole and Chief Financial Officer Ndapandula Tshitayi, while this week an Executive for Technical Services Petnen Frans was sent on suspension.
While addressing energy issues in the country, the Committee stressed that there is a need to maximise and optimise the Ruacana Power Plant to reduce electricity tariffs.
This is in addition to leveraging solar and wind resources that are abundant in the southern part of Namibia, especially in the Sperrgebiet area, in generating electricity.
“Namibia has public policies to produce sustainable and reliable energy. These policies promote energy security, efficient use, renewable energy development, and regional cooperation. The country has excess energy capacity but still imports 60% of its energy needs due to the low power plant capacity. NamPower receives more State funding in terms of investment in electricity-generating projects,” states the report.
It further noted that there is an increasing demand for power supply to mines which accounts for about 27% of the current electricity consumption, hence the onus is on the national power utility NamPower to increase the capacity.
The MPs were however quick to note that NamPower is putting up new power plants to meet the demands to increase production and to replace the bilateral agreements that may lapse soon.
“NamPower is actively engaged in multiple power generation initiatives with a combined capacity of 250MW. These projects aim to ensure a stable and reliable power supply that effectively caters to the energy needs of the Namibian population.”
“However, NamPower is facing several challenges, including a deficit in regional electricity supply and a lack of local capital with attractive interest rates, leading to project delays. Moreover, NamPower has difficulties securing land for national projects, insufficient State funding for strategic projects, defaulting customers, grid defection resulting from renewable energy technologies, and high foreign exchange exposure for natural gas-fired power plants,” further reveals the report.
The Committee further said there is a need to stop exporting uranium, instead it should be stored in a facility to pile it up until such a time it can be used within the country.
“We should consider establishing a Nuclear Power Plant to produce electricity. There have been offers from other countries to help Namibia to establish Nuclear Plants.”
Namibia holds the title of the world’s second largest uranium producer. However, the extracted uranium is exported, limiting the potential for domestic value-added processing and economic benefits within the country.
