Sankwasa defends City’s 4% electricity tariff hike
Urban and rural development minister, Sankwasa James Sankwasa, has defended the City of Windhoek’s proposed 4% electricity tariff increase, insisting that the adjustment is in line with NamPower’s 3.8% average tariff hike and is necessary to maintain the financial sustainability of the capital’s electricity services.Responding to a parliamentary question last week on whether the City would consider introducing a cap on annual tariff adjustments to ensure affordability, Sankwasa said:
“Unfortunately, electricity tariff adjustments cannot be stopped randomly, as they are driven by the underlying costs of generation, transmission and distribution. Since NamPower sources a significant portion of its electricity from Eskom, any increase in Eskom prices directly affects NamPower and, by extension, all downstream distributors, including the City of Windhoek.”
He added that introducing a cap without a compensatory government subsidy would jeopardise the financial viability of NamPower, the City of Windhoek and the broader electricity sector. “Such a move would risk undermining electricity viability,” he said.
On whether the proposed increases were aimed at covering inefficiencies within the City’s electricity supply operations, the minister dismissed such claims.
Sankwasa further noted that the municipality's electricity department “is currently severely understaffed, with only about 60% of its approved positions filled. As a result, the available personnel are highly stretched and operating under considerable work pressure.”
According to the 2018 Electricity Control Board (ECB) National Electricity Study, a single staff member in the City of Windhoek’s electricity department services approximately 13 customers, significantly higher than most large distributors in Namibia. “This reflects efficiency despite limited staffing,” he said.
Lowest rates
The minister also pointed out that the City’s distribution costs are among the lowest in the country, with electricity losses standing at about 6% - a rate he described as “excellent when benchmarked against both local and international electricity providers.”
He emphasised that the 4% tariff application was primarily driven by NamPower’s approved increase, the non-cost-reflective nature of current tariffs, rising maintenance costs, and chronic staff shortages amid Windhoek’s rapid growth.
“This revision is necessary to ensure cost recovery in accordance with guidelines set by the Electricity Control Board and to maintain the financial sustainability of the City’s electricity services,” he said.
He added that the municipality remains committed to keeping prices affordable while investing in reliable service delivery. “This commitment is reflected in Windhoek's current tariff levels, which remain among the lowest in Namibia. For comparison, the City of Windhoek’s rate stands at N$2.40, while Erongo is N$2.70, Cenored N$2.50, Nored N$2.60, the City of Cape Town N$3.00, eThekwini N$3.00, and Ekurhuleni N$3.60. Windhoek therefore remains the lowest at N$2.40.”
Addressing concerns about vulnerable groups, Sankwasa explained that the City employs cross-subsidisation tariffs to shield pensioners and low-income households. “Pensioners registered under the special tariff category currently pay just N$1.67 per kilowatt hour for the first 250 units per month, compared to the standard rate of N$2.47. This makes basic electricity more affordable,” he said.
Tariff adjustments
The minister further noted that the ECB’s scientific and regulatory framework ensures that electricity pricing remains fair and transparent. “Any deviation from this framework risks undermining the integrity of one of Africa's most stable electricity sectors, which is Namibia,” he added.
NamPower’s tariff applications over the past three years have consistently been reduced by the Electricity Control Board (ECB), although consumers were still subjected to notable increases.
In 2021/22, NamPower sought a 5.8% hike, but the ECB approved 2.92%, pushing the bulk tariff to N$1.6982 per kilowatt hour. In 2022/23, the utility applied for a 12.78% rise, but only 7.30% was approved, lifting the rate to N$1.8222. To cushion the blow, the National Energy Fund allocated N$100 million in subsidies. In 2023/24, NamPower requested a steep 16.87% adjustment, but the ECB settled on 8.97%, raising tariffs to N$1.9856. The government set aside N$200 million from the Long Run Marginal Cost fund to ease the strain on consumers.