NamPower’s debt collection plan and debt repayment incentive

By Kahenge S. Haulofu /

Last week we issued a public notice on the re-introduction of our Debt Collection Plan with a Debt Repayment Incentive attached to it, in which we communicated to the customers that owe us and the steps we plan to take if the defaulting customers do not settle their overdue accounts by 31 May 2023.

Of course, the announcement caused a lot of commotion among the members of the public and to the media as well, with inquiries.

I would like to remind the public that this was not the first time NamPower communicated on its Debt Collection Plan, to sensitise its customers and the public at large, about what is owed to us by our customers and how this is affecting our operations.

We issued a similar communication in 2021. The announcement is of course not a pleasant one for everyone affected, but it is necessary as collecting what is owed to us is important to the sustainability of our business and that of our country.

As many have read in our notice, NamPower’s debt from its customers stand at N$1,5 billion with an amount of N$842 million being overdue.

Whilst I acknowledge and applaud a few customers who have made an effort to bring their accounts up to date, most have not bothered to heed our pleas and their debts continue to escalate.

We have always and continue to engage our customers on the issue of overdue accounts. We do our best to enforce the collection of money owed to us in line with the provisions of the Power Supply Agreements and our Credit Policy, by having engagements, meetings and even offering instalment arrangements to the affected customers.

This has however not yielded the desired results as very few customers are making an effort to honour the instalment arrangements or to pay their outstanding accounts and hence the re-introduction of the Debt Collection Plan.

During the above engagements, NamPower went further and offered to waive interest charges on overdue accounts settled within a 12-month period, as well as to increase the payment terms of all customers from 14 days to 20 days from date of invoice.

With the re-introduction of the Debt Collection Plan, we are offering the same again, and in addition an incentive to write off the interest portion of the outstanding debt accumulated over the preceding 12 months to customers who settle their outstanding amount in full on or before 31 May 2023.

The situation as explained above has prompted NamPower to investigate options that will help with addressing the matter. Our Power Supply Agreements give NamPower the right to totally disconnect the electricity supply of our defaulting customers as per the agreements.

Hence our resolution to introduce a Debt Collection Plan, which is a scheduled disconnection of electricity supply to defaulting customers and is planned to commence on 5 June 2023. The plan will affect those customers who do not settle their overdue accounts on or before 31 May 2023.

The disconnection of electricity supply to defaulting customers is divided into stages starting from stage 1 which will result in electricity suspension of 4 hours for one (1) day in one week. Customers who fail to settle their debts will have these stages increased to cover an additional day each week until we reach stage 7 (in week 7) where there will be disconnection of 4 hours per day for the week. Stages 8 and 9 will see NamPower increasing the electricity suspension number of hours by 2 additional hours a day each week up to a maximum of 8 hours a day.

We trust that the Debt Collection Plan will assist us with recovering our dues and prevent the overdue accounts from increasing even further.

NamPower assures the public that we have considered several options on how to tackle this matter and we feel we have come up with the most practical solution, which will not negatively expose national infrastructure and put equipment at risk.

As highlighted earlier, the suspension of power supply is a right which NamPower has owing to the material breach of its clients paying obligations and is supported by the NamPower Credit Policy. This is a fundamental commercial condition of the PSA, which principle allows for debt recovery.

It is important to emphasise that we have granted our customers sufficient period to make arrangements to settle their dues which is 30 days from the date of the notification and to give them ample time to honour their debts. We are happy to announce that CENORED-Okahandja and the Lüderitz Town Council have made acceptable arrangements with respect to their accounts and have been removed from the list of defaulters.

NamPower acknowledges the significant role that electricity plays towards the country’s socio-economic development.

Thus, to enable NamPower to continue delivering on its mandate, which is that of ensuring security of supply to the nation, it is important that customers honour their commitment of paying their electricity bills timeously. NamPower values its customers, and we trust that they will be able to honour their debt commitment before we carry out our intended plan.

There has been a lot of misinterpretation of terms by the media and the public in relation to the suspension of electricity supply to NamPower customers with overdue accounts (and power outages in general).

We would like to clarify this, once again, by providing you, and through you, the public, the correct definitions of the terms that are continuously misused. Below are the definitions as follows:

Electricity suspension/disconnection – Is the planned disconnection of electricity supply to a customer/s due to a breach in contract, for example non-payment of an account or for required electrical safety measures not met.

Loadshedding – is load reduction achieved by manual operator action to disconnect load at certain points on the transmission or distribution system in order to avoid a national blackout.

Blackout – Is an unplanned/uncontrolled interruption of power supply over a wide geographical area which has a severe impact on the affected areas.

Partial Blackout – Is loss of power supply to a certain supply area. The most likely cause being the failure of the transmission system supplying the specific area.

National Blackout – Is the loss of power supply to the entire country. The most likely cause being an unforeseen sequence of events that results in a cascading loss of generation, eventually leading to a complete loss of supply across the country.

Planned Outage – is a scheduled power outage arranged in advance for a specific date and duration for purposes of maintenance or repairs on any apparatus.

Unplanned Outage – is an unscheduled interruption of power supply after a fault such as damaged powerlines due to lighting strikes, falling trees, bushfires, or general failure on apparatus has been detected.

I hope the above definitions will clarify any confusion or doubts that the public might have had about these specific terms.

– Mr Kahenge S. Haulofu is Managing Director for NamPower, Namibia’s power utility.