ECB to create central RED despite City pushback
The Electricity Control Board (ECB) says it will forge ahead with the establishment of a central regional electricity distributor (RED) - despite hesitancy from the City of Windhoek, which has resisted efforts to join any such body.The City, which is entangled in a fight with Ongos Valley Development (OVD) over the latter’s plan to produce its own electricity, is concerned that a RED would force it to subsidise rural electricity consumers in the Khomas region.
ECB CEO Robert Kahimise stressed the importance of the establishment of a central RED, arguing that despite the City’s resistance, declining revenue margins may render Windhoek unable to effectively and efficiently provide electricity to its residents in the long term.
He made the comments at the launch of an ECB initiative aimed at educating consumers on measures they can adopt to save on electricity costs.
“The envisaged central RED was 80% Windhoek, due to the value and size of the infrastructure, and the size of the city. All things equal, that is why there is some level of resistance from the City to join the RED.”
“Maybe they might argue ‘What’s in it for us because we are a strong distributor already, why should we join a RED where we cross-subsidise smaller villages?’ These are some of the engagements from the City, but where we are sitting, we are also looking at the margins in electricity; they are getting smaller and smaller. Windhoek will not be able to efficiently and effectively distribute electricity for several years,” Kahimise said.
Need remains
According to the CEO, irrespective of the City’s stance, the need exists to establish a RED, as well as to consolidate power generation and distribution equipment in central Namibia.
“The need remains to consolidate distribution assets in a typical RED - or whatever model - so discussions are continuing, with some modifications to the RED model,” he said.
Despite the City’s resistance, the central RED’s establishment is in the works, he said.
“A central RED is not off the table, it has just been modified. We are looking forward to hearing from the EDI Summit so that we can see what the way forward is,” Kahimise said.
City CEO Moses Matyayi did not respond to the ECB’s claims regarding its hesitancy to join a central RED. He was equally mum when asked whether the City’s electricity revenue margins were on the decline.
NMH also engaged OVD on whether it would be keen to formally join the central RED.
The City is challenging the award of an electricity supply and distribution licence to OVD.
OVD’s developers, Rent-to-Own Namibia, were unwilling to comment, with its CEO Inocencio Warde saying: “At the moment, I do not want to comment on anything related to electricity”.