NamPower's monopoly ­secured, for now

22 October 2018 | Infrastructure

Plans to break NamPower's monopoly have seemingly been delayed as government is stalling with plans to dismantle its dominance and do away with the single-buyer model.

This model compels independent power producers to sell electricity to NamPower, who in turn sells it to municipalities, regional electricity distributors and mines across the country.

Government announced its intention to do away with NamPower's single-buyer model when it hosted the Invest in Namibia International Conference late in 2016.

At the time, former mines and energy minister Obeth Kandjoze announced that NamPower's dominance would be done away with in a move seen to encourage investment in the energy sector.

Two years since the announcement, current energy minister, Tom Alweendo, has said that while the dismantling of the model has been agreed to, government is still studying anticipated impacts.

“Cabinet has discussed the issue of a single-buyer model and agreed with the principle. However, we are still having internal consultations to assess the full economic impact of such a move,” Alweendo told this newspaper.

Permanent secretary of mines and energy Simeon Negumbo told our sister publication Namibian Sun last year that a study had been commissioned to establish an appropriate framework that would allow independent power producers to participate in generation activities.

According to Negumbo, the process entails a review of the current market model and the development of market rules for likely participants in the power generation sector.

“The purpose of this project is to develop an appropriate market structure framework which will open the Nami-bian power market to private investors, and encourage investors to participate in growing Namibian generation opportunities,” Negumbo said.

Giving a report on work done, Negumbo said that a consultant was appointed at the beginning of the year to steer the process while one-on-one meetings with all major stakeholders in the energy sector were held. A second stakeholder meeting took place recently where role players were briefed and input was garnered.

Stakeholders have been engaged to develop market rules to do away with the single-buyer model, Negumbo said.

The review was also being done with the buy-in of prospective power producers. “While developing an appropriate market framework and rules, the mini-stry expects the project to be considered in a participatory manner.”

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