Electricity consumers will pay less than half of the increase initially sought by NamPower after the Government stepped in with a N$90 million relief package that reduced the utility’s approved bulk tariff adjustment from 4.8% to 3.7%.
The new bulk tariff, approved by the Electricity Control Board (ECB), takes effect on 1 August 2026 and will see the average bulk electricity price increase from N$2.06 per kilowatt-hour (kWh) to N$2.14/kWh.
NamPower had originally applied for an 8.4% increase, which would have pushed the average bulk tariff to N$2.23/kWh.
The Government intervention comprises N$50 million from the Long Run Marginal Cost Fund and N$40 million from the National Energy Fund following engagements between the ECB and the Minister of Industries, Mines and Energy. Without the intervention, consumers would have absorbed the full 4.8% increase approved by the regulator.
The ECB said it had subjected NamPower’s application to an extensive review, assessing the utility’s financial sustainability, the economic impact of higher electricity prices, the balance between locally generated and imported electricity, and the affordability pressures facing consumers.
Public consultations were also held with business organisations, agricultural unions, renewable energy developers, local authorities, Regional Electricity Distributors (REDs), Government institutions and consumer representatives before the final determination was made.
According to the regulator, the approved revenue requirement remains sufficient to keep NamPower financially sustainable, allowing the utility to maintain profitability, adequate liquidity and its ability to service debt while continuing to operate and maintain the national electricity network.
However, the ECB urged the utility to strengthen operational efficiency, improve the recovery of outstanding customer debts and ensure prudent capital allocation to safeguard its long-term financial resilience.
The regulator also concluded that the 3.7% adjustment is unlikely to fuel inflation because it remains below Namibia’s current inflation rate of 4.4%.
It estimates that electricity distributors will increase end-user tariffs by an average of 3.7% once their own applications are approved.
The ECB further directed all electricity distributors to leave social tariffs unchanged, meaning customers who qualify for subsidised electricity under social tariff schemes will not face any increase despite the higher bulk price.
The Board described the Government’s intervention as an important measure to protect vulnerable households, small businesses and other electricity users from a steeper increase at a time when many consumers continue to face economic pressure.
“Electricity is not a luxury: amongst others it lights homes, keeps clinics and schools running, and sustains the small businesses on which many livelihoods depend,” the ECB said, adding that the Government had deliberately absorbed part of the cost increase on behalf of consumers.
The regulator nevertheless cautioned that keeping tariffs artificially low over extended periods could undermine investment in electricity infrastructure, eventually increasing the risk of ageing equipment, reduced system reliability and power outages.
It said regular tariff reviews remain necessary to ensure the long-term financial health of the electricity sector while maintaining a reliable supply of power.
The ECB also commended Government, NamPower, Independent Power Producers and other industry stakeholders for expanding Namibia’s domestic electricity generation capacity through renewable energy projects and strategic infrastructure investments. Despite this progress, it warned that continued reliance on imported electricity still exposes the country to supply disruptions, volatile regional electricity prices and exchange-rate fluctuations, underscoring the need to accelerate investment in dependable local baseload generation alongside renewable energy projects.
The approved bulk tariff applies to NamPower’s bulk customers, including the Regional Electricity Distributors, local authorities, regional councils and large transmission-connected customers such as mines. These distributors must now submit their own tariff applications to the ECB before any revised retail electricity prices can take effect.
The regulator also expressed concern over outstanding debts owed to NamPower, particularly by local authorities and regional councils, warning that delayed payments threaten the financial sustainability of the electricity supply industry.
It said engagements are continuing to secure structured repayment arrangements and urged all distributors to honour their financial obligations to protect the stability of the national electricity system.
