Finance and Public Enterprises Minister Iipumbu Shiimi yesterday shocked the national power utility company NamPower, ordering the company not to proceed with the planned power suspensions for indebted local councils that started on Monday.
Shiimi stated the ministry briefed Cabinet on the deteriorating debt situation of local authorities as well as the intention of NamPower to institute power suspensions against defaulting local authorities, among others.
"Accordingly, Cabinet has issued a directive for NamPower to put on hold the planned power suspensions pending further consultations between the finance ministry, urban and rural development ministry and local authorities," reads the letter dated 5 June 2023, and directed to Daniel Motinga, NamPower's board chairperson.
Addressing a media briefing last month, NamPower managing director Kahenge Haulofu said the corporation was owed a staggering N$1.5 billion, with N$842 million being overdue. He stressed it is important to collect what is owed to them for the sustainability of their business and that of the country.
Furthermore, Shiimi, delivering a ministerial statement in parliament, stated that following the issuance of the public notices by NamPower announcing their intention to disconnect defaulting local authorities, the ministry requested NamPower to appraise it with information pertaining to the debt settlement by defaulters before instituting power suspensions. Nevertheless, he noted NamPower has not responded to the request to date.
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"The ministry communicated this directive to NamPower accordingly on 5 June 2023 and they nevertheless proceeded to suspend power supply to defaulting local authorities. On our end, we have called for a meeting with the NamPower board and management to obtain an explanation why they failed to provide us with the information we requested and comply with the Cabinet directive, as well as to ensure compliance, going forward," explained Shiimi.
He further appealed to local authorities with high debt to approach the national power utility and make payment arrangements, noting this is important for the operations of NamPower to remain sustainable.
Responding to New Era regarding the matter, Motinga said management and the board are engaging with all relevant stakeholders on the matter, and will inform the media of the outcome of the consultations in due course.
In the debt collection plan, NamPower noted to encourage customers to settle their debts, the company has resolved to extend a debt settlement incentive whereby NamPower will write off the interest portion of the outstanding debt accrued over the preceding 12 months period in the event that the customer settles the outstanding amount in full on or before 31 May 2023.
This incentive will be limited to interest charged on that specific outstanding capital amount up to a maximum of 12 months.
