NAMIBIA’S electricity imports have surged to 28.4% year-on-year, highlighting the country’s ongoing struggle with local energy generation. 

The Bank of Namibia stated that local electricity production fell by 6.5% during the third quarter of 2024. 

This is exacerbated by reduced water availability and technical issues at the Ruacana hydro-power plant. 

“This decline in local generation is concerning, especially as we see a significant rise in consumption,” reads the central bank’s recent quarterly report. 

The report indicates that electricity consumption increased by 14% year-on-year. This is driven by economic activities, particularly in the mining sector, as well as demographic growth necessitating electrification in various regions. 

“The increase in demand reflects broader economic trends and the need for reliable electricity supply,” added the bank. On a quarterly basis, local generation plummeted by 38.2%, primarily due to seasonal factors. However, seasonally adjusted figures showed an increase of 8.2%. 

This suggests that while seasonal variations impact production, there is potential for recovery. 

The government has been vocal about its plans to reduce reliance on imports and enhance domestic production capacity. 

Despite these challenges, Namibia aims to decrease its electricity importation from 80% to 29% by 2028 through increased domestic generation. 

The government is exploring renewable energy options, and has initiated policies to attract private investment in this sector. 

As Namibia grapples with these energy challenges, the reliance on imports raises concerns about vulnerability in the face of fluctuating regional supply dynamics. 

The path forward will depend on the effective implementation of renewable energy projects and infrastructure development to meet growing demand sustainably. 

Furthermore, Namibia is also facing a steep rise in electricity expenditures. 

Total spending on purchased power has increased by 25% from approximately N$70.86 billion (US$4 billion) in 2019 to N$86.85 billion (US$5 billion) in 2023. 

This surge is largely attributed to the rising costs of electricity imports, which have more than doubled since 2019. 

The increase has grown from N$13.90 billion (US$800 million) to over N$31.23 billion (US$1.8 billion), despite a decline in the amount of electricity imported. 

A report by the International Energy Agency, titled ‘Renewable Energy Opportunities’, reveals that the depreciation of the Namibian dollar against the United States dollar (USD) has significantly impacted costs. 

Over 80% of the country’s electricity imports are contracted in USD. 

The study added that while electricity imports decreased from 3 042 Gigawatt-hour (GWh) in 2019 to 2 750 GWh in 2023, the USD appreciated by nearly 20%. -mndjavera@nepc.com.na