EDI reform and restructuring summit kicks off

02 Oct 2014 08:00am
WINDHOEK, 02 OCT (NAMPA) – Experts and energy sector representatives are attending a three-day summit to discuss the Electricity Distribution Industry (EDI)’s reform.
The originally-envisaged EDI consolidation and reform process which was started in 2001 remains incomplete, and has come to a standstill.
Stakeholders agreed that a lack of leadership and ongoing disagreements amongst sector participants were the main causes for this stagnation, the EDI reform draft states, made available to delegates during the event.
The summit is taking place under the theme 'Promoting the sustainable distribution of electricity for Vision 2030’ at a lodge just outside Windhoek.
Speaking at the opening on Wednesday, Minister of Mines and Energy Isak Katali stressed that his ministry had tasked the Electricity Control Board (ECB) to identify and make recommendations on how the areas outside the current established Regional Electricity Distributors (REDs) could be optimally restructured in order to improve efficiency and service delivery.
“As you will find out over the next three days, different structure options have been studied and grouped as feasible, interim and non-desirable options.
Without pre-empting our deliberations, under feasible options, for example, there is mention of a National Electricity Distributor (NED),” he stated.
Katali said the interim option proposed that larger and well-established local authorities provide technical services to regional councils, as well as small or least- developed local authorities.
What is not desired is combining only village councils and regional councils, or combining medium and small local authorities, or corporatising local authorities’ electricity businesses.
The EDI reform draft states that feasible EDI reform options include forming two separate REDs encompassing all of central and all of southern Namibia; forming a single RED serving both central and southern Namibia; forming a single NED serving the entire Namibia; having central Namibia join the Central-North Regional Electricity Distributor (CENORED) and southern Namibia join Erongo RED; and combining all southern (and central) local authorities and regional councils into one company, while excluding NamPower’s distribution.
The EDI reform process first saw the establishment of NORED in 2002 in an area which had previously been served by Northern Electricity.
It was formed by the local authorities and regional councils in the area, and by NamPower.
By 2005, both CENORED and Erongo RED were established, and became operational.
The creation of REDs realised benefits such as economies of scale, equal regional focus in terms of expertise and manpower, harmonised tariffs, improved quality of supply and services, customer focus and many more.
“While these benefits might have come about, it does not imply that all is well in these REDs areas.
Some levels of unhappiness still exist, for example the fact that REDs may reduce or limit local authorities’ income from electricity; and removed pre-paid cashflow from local authorities or regional councils;” Katali said.
REDs might also dilute local development imperatives, and can complicate integrated local planning; while tariffs increase as a result of maintenance being done, which was not done before.
The summit ends on Friday.