Namibia Struggles to Recover $700 Million in Overdue Electricity Bills

The Namibia Power Corporation (NamPower) says it is facing increasing financial pressure as it struggles to recover approximately N$700 million (over $41 Million) in electricity bills that have remained unpaid for more than 90 days.

According to NamPower’s head of electricity pricing, Desdemona Lubinda, the amount of outstanding debt has remained at around N$700 million on average over the past six years and is now rising further.

Lubinda warned that the growing debt burden is unsustainable because the utility relies on those payments to meet its financial obligations, including settling accounts with electricity suppliers and covering operational expenses.

She explained that overdue payments older than 90 days have consistently averaged N$700 million during the last six years and continue to increase, putting additional strain on the company’s finances.

The development comes as NamPower has applied to the Electricity Control Board for approval of an 8.4% electricity tariff increase. If the proposal is approved, the average tariff would increase from N$2.16 to N$2.23 per kilowatt-hour.

The power utility says the proposed adjustment is necessary to manage rising operating costs, maintain a stable electricity supply and support investments in new energy infrastructure.

Lubinda noted that a large portion of NamPower’s expenses comes from purchasing electricity from independent power producers, importing power from neighboring countries and running its own generation facilities.

Energy purchases account for roughly 63% of the company’s total costs, while fixed operational expenses represent about 22%.

NamPower projects electricity demand to grow by approximately 2%, which could lead to a modest increase in electricity sales.

The utility is also continuing to invest in several energy projects, including new solar power plants, upgrades to the Ruacana hydropower station and expansion of transmission lines and substations aimed at strengthening the national electricity network.

Lubinda emphasized that although the actual cost-reflective tariff increase would be about 30.4%, the company deliberately limited its request to 8.4% to reduce the financial burden on consumers.

She cautioned that if NamPower fails to collect sufficient revenue to cover its costs, the company could eventually face financial losses that may affect both its day-to-day operations and its ability to fund future energy projects.