24 April 2019

Namibia: Cabinet Approves Revised Electricity Supply Model

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(file photo)

Cabinet has approved a revised single buyer market model for the supply of electricity, which allows more independent power producers to compete. This model will be implemented in September this year.

The modified model allows electricity consumers and independent power producers (IPPs) to transact with each other directly for the supply of electricity, to allow for competition as well as private sector investment.

Addressing a media conference in Windhoek last Thursday, information and communication technology minister Stanley Simataa said Cabinet approved the revised model during the sixth Cabinet meeting last Tuesday, after it noted that the existing model did not allow for IPPs to sell whatever they generate directly to the consumers as they are required to sell to the Namibia Power Corporation (NamPower).

Competition was also restrained for IPPs, thus revising the framework will now allow IPPs to transact with each other, and directly with the consumers.

"Since we are opening up, you will also have foreign entities investing in the energy sector," Simataa said.

He noted that in the event where foreign investors are interested in investing in the energy sector, they should be persuaded to form joint ventures with Namibian entities.

President Hage Geingob said in his state of the nation address in the National Assembly (NA) last week that Namibia strives to achieve energy supply security through a mix of economically competitive and reliable sources, with emphasis on the development of its own generating capacity.

He added that Namibia's electricity demand stood at 652 megawatts in December 2018, excluding the Skorpion Zinc mine, which gets its electricity supply directly from Eskom.

The country increased local generating capacity from 400 megawatts in 2015 to 557 megawatts in 2018 through NamPower and IPPs.

The president said Namibia generates 40% of its own electricity demand from renewable sources, which contribute a total of 189 megawatts to the national supply.

"The unbundling of distribution is a key reform which has opened up the sector for investment, to the tune of N$3 billion," said Geingob. - Nampa

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