Banner Left

Private-public sector investments needed to lower electricity costs

Minister of mines and energy Tom Alweendo

Traditional forms of funding for energy projects has driven up the cost of electricity, making it unaffordable for most people.

This was shared by minister of mines and energy Tom Alweendo, speaking during the 15th Assembly of the International Renewable Energy Agency (Irena) earlier this month. Alweendo said the traditional methods of private sector investment make electricity unaffordable as they are driven by profit.

According to Alweendo, funding should not solely be sourced from the private sector; partnership with the public sector or government should also be formed.

“We need to look at where we are able to blend private sector capital with public sector capital, which would then have the effect of lowering the cost of electricity that’s going to be generated,” said Alweendo.

The minister said Western countries that achieved a high electrification rate did not fund projects with private sector money.

“If they are just funded with typical private sector capital, which attracts the highest cost of capital, that electricity that’s going to be generated will be unaffordable for most people,” said Alweendo.

This means that although access to electricity would increase, people would still be unable to use it due to unaffordability.

As of April 2024, the average cost of electricity in Namibia, based on the NamPower bulk tariff, is around N$2.14 per kilowatt-hour (kWh), which is the highest in southern Africa.

Currently the country’s overall electrification rate is estimated at 50%, but between 70 and 80% of rural households remain without power.

Namibia’s National Electrification Policy aims to achieve universal electricity access by 2040.

Wisdom Togobo, a sustainable energy expert from Ghana, said the country introduced different initiatives to make electricity both affordable and accessible, such as tariff categories that allow citizens to pay a subsidised rate.

“Ghanaians pay a subsidised rate for electricity consumption up to a certain limit. This ensures that basic electricity needs are affordable for everyone,” said Togobo.

Additionally, the country banned inefficient appliances and provided subsidies for efficient appliances.

“Ghana banned the import and sale of inefficient appliances like incandescent bulbs.This encourages people to use more efficient appliances that consume less electricity. [The country] also introduced a rebate scheme to subsidise the purchase of energy-efficient refrigerators,” said Tobogo.

The government has deployed off-grid systems for those areas that were too remote to connect to the national grid.

“Ghana deployed off-grid solar systems. The government subsidises the cost of the solar panels but requires people to purchase their own batteries. This encourages people to take care of their batteries since they are financially responsible for them,” said Togobo.

He said these are all things Namibia can do to make electricity cheaper.

Currently, 89% of Ghana is electrified and the target is to achieve universal access by 2030.

Stay informed with The Namibian – your source for credible journalism. Get in-depth reporting and opinions for only N$85 a month. Invest in journalism, invest in democracy –
Subscribe Now!

Latest News