Stakeholders in the electricity distribution industry are in talks to determine whether or not to establish a central regional electricity distributor.
The Central Red would cater to Windhoek and surrounding areas.
Even though some stakeholders agree that REDS come with added benefits, others are not so convinced. The stakeholder consultations will allow the participants to scrutinize and provide counter recommendations.
The Technical Regulation General Manager for Electricity Control Board (ECB), Rojas Manyame said, the perception that the RED is just another structure added to the industry at additional cost, holds no water. He said the RED is a consolidated business of existing licensees.
Thus, the RED is not another structure but rather a substitute structure for the existing electricity distribution businesses in Namibia. It has also been proven that the REDs aren't the most expensive other than the municipalities.
The Deputy Minister of Mines and Energy, Kornelia Shilunga says even though different stakeholders have strong opinions about the creation of another RED, the deliberations need to be done with an end goal in mind.
"It does not imply that all is well in these REDs, areas as discontentment does exist. It's a fact that REDS created funding challenges for local authorities since revenue from electricity scales, which was used to subsidize other non-making services, was channeled toward sustaining the electricity business. In some places, tariffs have increased because of maintenance work that was previously neglected. These are daunting challenges that can only be tackled collaboratively."
The Minister of Urban and Rural Development, Erastus Uutoni says with the establishment of new REDS, Local authorities can become shareholders and can be assured that their electricity functions are performed by competent entities.
"The only challenge as I said, is some of the local authorities are scared that some of them are benefitting when they are distributing on their own, now they're scared that once this is taken away from them, they will no longer benefit and that is the consideration we really need to look at."
Apart from Central Red, Southern Red is at an advanced stage of being established with the shareholders' agreement having been submitted to the Attorney General for approval.