The directors and management of the national power utility have resolved to proceed with planned power suspensions that commenced on Monday for indebted local authorities as per its debt collection plan.
This is despite NamPower having received a Cabinet directive to put the decision on hold, pending further consultation between the finance ministry, urban and rural development ministry, as well as local authorities.
In a statement issued yesterday, NamPower confirmed receiving the Cabinet directive but noted that after due consideration, the board unanimously decided to exercise its fiduciary responsibilities towards the company, and to protect the interest of the company and its stakeholders.
“The company resolved to proceed with the disconnection plan because it is in the best interest of the financial sustainability of the company and for the sustainability of electricity supply in the country. Disconnecting defaulting customers was the last resort after exhausting all existing interventions to collect long outstanding debts, as non-payment of debts detrimentally affects the company’s duty to supply electricity to the entire country on a sustainable basis,” reads the statement.
Addressing a media briefing last month, NamPower managing director Kahenge Haulofu said the corporation was owed a staggering N$1.5 billion, with N$842 million being overdue. He stressed it is important to collect what is owed for the sustainability of the business and that of the country.
The power utility yesterday said it recognises the unintended consequence of the sustained failure to collect dues from clients, explaining “it will result in all future borrowings for generation and transmission infrastructure being guaranteed by the sovereign, due to the entity’s inability to collect contractually”.
“NamPower uses this opportunity to once again plead with its defaulting customers to pay their dues to enable the company to continue delivering on its mandate – that of ensuring the security of supply to Namibia,” the corporation pleaded.
Meanwhile, in the National Assembly on Tuesday, finance and public enterprises minister Iipumbu Shiimi appealed to local authorities with high debt to approach NamPower to make payment arrangements. Shiimi said this is important for NamPower operations to remain sustainable.
In its debt collection plan, NamPower encouraged customers to settle their debts and even resolved to extend a debt settlement incentive, whereby it would write off the interest portion of outstanding debt accrued over the preceding 12 months.
This was provided so customers settled the outstanding debt in full on or before 31 May 2023.
This particular incentive was limited to interest charged on outstanding capital amounts up to a maximum of 12 months.