Staff Reporter
THE Namibia Power Corporation (NamPower) has submitted a bulk tariff application of 8.4% for the 2026/2027 financial year, increasing the average tariff from 206.11 c/kWh to 223.40 c/kWh.
The Electricity Control Board (ECB) stated that, as part of the process to ensure cost-reflective tariffs, an annual tariff application is submitted by NamPower to the ECB Board.
The tariff application considers a reconciliation for the prior financial year (2024/25) and a forecast for the next financial year (2026/27), which is the tariff application year. The ECB will review the tariff application and approve a tariff adjustment.
The projected cost for the 2026/27 tariff application is based on demand, energy supply, assets constructed or under construction, expected inflation, the exchange rate, power purchase agreement prices, and sales.
Together, these forecasts are used to determine the revenue requirement for the year, which is the total amount of revenue NamPower requires to remain cost-reflective in line with the tariff methodology.
The ECB further explained that the cost to procure energy forms the largest portion of the revenue requirement, including import contracts with Zesco, ZPC, and Eskom, as well as energy imported from the Southern African Power Pool (SAPP), among others.
Furthermore, the Board noted that the widening gap between NamPower’s actual operating costs and the operating costs historically applied for and approved is a significant concern.
“Taking all these factors into account, NamPower would, in principle, require a 30.4% tariff increase for FY2026/27 to achieve cost reflectivity in line with the objectives of the National Energy Policy (2017). However, NamPower recognises the importance of balancing tariff cost reflectivity with affordability. It is clear that an immediate increase of this magnitude would be unsustainable for Namibian customers and could have unintended consequences, ultimately undermining NamPower’s long-term national interest and financial position,” the Board said.
Accordingly, the Board said that NamPower has elected to apply for a more measured tariff increase of 8.4% that sets a clear trajectory toward cost-reflective tariffs.
To achieve this, NamPower will defer under-recoveries as well as a significant portion of the return and depreciation.
Picture for illustrative purposes only. Photo: File
