Beruflich Dokumente
Kultur Dokumente
Voltage Magnitude........................................................................................................................................................29
Voltage Unbalance........................................................................................................................................................29
Quality of Service Standards........................................................................................................................................29
Customer Complaints....................................................................................................................................................29
Wiremens Licensing in the Namibian ESI...................................................................................................................30
Technical Audit of the ESI.............................................................................................................................................31
Assessment of Power Supply Status to Essential Service Facilities..........................................................................31
Demand Side Management (DSM) Initiatives..........................................................................................................................31
Renewable Energy and Energy Efficiency.................................................................................................................................32
Renewable Energy Procurement Mechanism............................................................................................................33
Addressing the Security of Supply through the NIRP Development......................................................................................33
Overview of the NIRP Process......................................................................................................................................33
Planning Parameters and Criteria................................................................................................................................33
The NIRP Reference Demand Forecast........................................................................................................................34
Technical Regulatory Tools..........................................................................................................................................................34
Technical Rules...............................................................................................................................................................34
Grid Code........................................................................................................................................................................35
Safety Code....................................................................................................................................................................35
Optimised Maintenance Guidelines............................................................................................................................35
Distribution Infrastructure Standards...........................................................................................................................35
Audit Manual.................................................................................................................................................................35
Licensing.......................................................................................................................................................................................37
New Licenses.................................................................................................................................................................37
Amended Licenses..........................................................................................................................................37
Renewed Licenses..........................................................................................................................................37
License Applications under Review..............................................................................................................37
Independent Power Producers (IPPs)...........................................................................................................37
Industry Analysis..........................................................................................................................................................................38
Performance Management in the Electricity Sector..................................................................................................38
Licensing Compliance....................................................................................................................................................38
Customer Complaints....................................................................................................................................................39
Performance of Regional Electricity Distributors........................................................................................................39
Performance of Distributors Outside the RED Areas..................................................................................................40
Performance by Municipal Electricity Distributors.....................................................................................................41
Performance by Village Authority Distributors...........................................................................................................42
Performance by NamPowers Distribution Areas.......................................................................................................42
Performance of Farmer Schemes................................................................................................................................43
Transmission Overview.................................................................................................................................................43
Generation Overview....................................................................................................................................................44
Key ESI Statistics...........................................................................................................................................................................45
Status of Strategic Plan Projects.................................................................................................................................................49
Regional & International Activities............................................................................................................................................49
RERA Activities...............................................................................................................................................................49
African Forum for Utility Regulators (AFUR) Training................................................................................................50
Electricity Markets, Cross Border Trading and Power Pools......................................................................................50
Consumer Participation in Regulation of the Infrastructure Sector..........................................................................50
World Energy Council....................................................................................................................................................50
Annual Financial Statements....................................................................................................................................................................52
Vision, Mission
Statement and Corporate
Values
Vision
To be recognised as a leading regulator for achieving optimum viability and competition in the Namibian energy industry.
Mission Statement
To regulate and control the Namibian ESI in the interest of all stakeholders with regard to price, quality and reliability
Corporate Values
Professionalism
To conduct every task to a standard of excellence and to maintain the highest level of technical competence and personal
integrity / efficiency so as to ensure the satisfaction of all stakeholders.
Integrity
To be accountable and act in accordance with government policy and accept full responsibility of all outcomes; to be transparent.
open, honest and fair in all dealings and communications with stakeholders.
Innovation
To innovate through learning, teamwork and knowledge-sharing in order to remain competitive in the market and continue
to deliver excellent service.
Sustainability
To ensure the endowment of Namibias energy resources are available to present and future generations by considering our
economic, environmental and social responsibility.
Abbreviations /
Acronyms
NGO......................Non-governmental Organisation
NP.........................NamPower
PV.........................Photovoltaic
QoS.......................Quality of Supply
RE.........................Renewable Energy
Improvement Programme
Fig.........................Figure
Gx.........................Generation
HIV........................Human Immunodeficiency Virus
RC.........................Regional Council
LA.........................Local Authority
Community
Development
MW.......................Mega Watts
Tx..........................Transmission
TOU.......................Time of Use
ECB Management
Chairpersons Report
It is with sincere appreciation and a great sense of achievement that I, on
behalf of the Electricity Control Boards (ECB) board members, present the
2012 ECB Annual Report.
Despite the various challenges faced in the Namibian ESI, including shortage of generation capacity and rising costs, I am proud to confirm that the
ECB has posted notable achievements to improve the plight of the Namibian electricity consumer regarding access, affordability and availability of
electricity as well as improving the sector performance. The main focus of
the review period was further consolidation and enforcement of the regulatory regime to enable the above achievements.
10
Access
The industrialisation status aspirations articulated in the national development plan or Vision 2030 document are complemented by the 2010 SADC
Regional Energy Access Strategy and Action Plan report which sets specific targets and detailed action plans. To generate the desired
impact, Namibias roadmap cannot be implemented in isolation, but through building up on the progressive regional initiatives. For
this to happen more effectively however, it is the ECB intention to streamline access- related issues to ensure that at both national and
regional levels, a common denominator is the point of reference.
These issues include:
Consensus on quantitative and qualitative methods used for national statistical data collection, review and verification.
To illustrate a case in point, the current access to electricity in Namibia is about 45 50%, taking into account the fact that urban Namibia is regarded as at least 78% electrified and electricity access in rural Namibia is at about 14%. In terms of the 2010 Master Plan
on Rural Electricity Distribution, access to electricity is defined as a household being within 500m radius from a low voltage supply point
(distribution transformer). During the update and review of the older version of the aforementioned Master Plan, the methodology that
was used to assess electricity access in rural areas was counting the number of electrified villages (homesteads) in the whole country
and use that figure as a ratio of the total number of villages (homesteads) countrywide.
11
ply and service standards that will justify the end customers value for money.
The regional electricity supply situation continues to face challenges caused in part, by lack of adequate investment in the sector.
Despite the huge potential, many conceptualised power generation projects have not been implemented/realised. Apart from lack of
political commitment and preference of national priorities to regional ones, non-implementation of cost reflective tariffs has been one
of the major reasons. Since many power utilities have not been properly capitalised to enable them to implement generation projects
on the strength of their own balance sheets, they need to go into partnership agreements with private investors. The fact that electricity
tariffs are not cost-reflective has discouraged private investors from making investment commitments in the regions power sector, a
fact that has on average, worsened the reliability of electricity supply in the region.
It is unfortunate that those countries including Namibia that relied on electricity imports have not yet.
Security of supply
Reliable supply of affordable Energy is critical for national development and hence a national security issue.
The power supply situation is currently critical and is expected to remain as such until the Kudu Gas Power Plant comes on stream in
2018. The countrys current maximum (peak) demand is estimated at about 534 MW and grows by 4% annually. Namibia relies heavily
on imports of electricity ranging from 40% to 80% depending on the available internal generating capacity subject to seasonal variability of climatic/hydrological conditions and other factors.
Desirous to effectively address Namibias security of supply against the backdrop of perennial insufficient generation capacity within the
SADC region, the Ministry of Mines and Energy (MME) developed a National Integrated Resource Plan (NIRP).
11
The NIRP development project commenced on 1 July 2011 and was completed on 30 April 2013, with the submission of the final
report which is expected to become public soon after endorsement and approval by the Minister of Mines and Energy. The first step in
preparing the NIRP was to develop a power-system demand forecast for the period 2011-2031. This considered the likely requirements
in each sector of the economy, reflecting projected economic and population growth rates. The forecast was adjusted by offsets from
energy efficiency gains considered possible from implementation of demand-side management programmes. Consideration was also
given to the achievement of Vision 2030 in the forecast.
Between 2012 and 2031 peak demand is projected to rise from 550 MW to 1100 MW while the energy demand is expected to rise
from 3,5 TWh to 7,5 TWh. A full range of power-generation technologies that could be of interest in Namibia were identified and
parameters, such as capital cost, operating cost, production capability and grid-connection costs, were estimated for each technology.
Using a generation-planning model, a large number of sequences consisting of combinations of generating plants that could satisfy the
projected power-system needs at a specified level of reliability was analysed.
The recommended NIRP will require a significant increase in investment in new generation and transmission assets to meet the
countrys increased power demands resulting from economic growth. The planned approach will reduce power imports primarily
through development of the Kudu power plant operating on Namibias offshore natural gas reserves, as well as increased use of
renewable power by developing solar PV, concentrated solar power (CSP) and wind-power plants. Taking advantage of the fact that
Namibia has one of the best solar radiation rates in the world, the Government is enabling the development of solar photovoltaic power
generation technologies through a special purpose vehicle, the Project Steering Committee (PSC) established to facilitate procurement
of 30 MW through a competitive bidding process. The adopted procurement mechanisms take care of all other renewable energy
technologies. The demand-side management program, complemented by the envisaged measurement and verification protocols/
guidelines, is expected to improve energy efficiency.
12
13
14
which should help the country manage the crisis until at least 2018.
I wish to emphasise, however, that NamPower will need the cooperation
and support of all stakeholders to succeed in effectively managing the
power supply situation.
The countrys current maximum (peak) demand is estimated at about 534 MW and on average grows by 4% annually. Namibia relies
heavily on imported electricity, varying from 40% to 80% during dry seasons when the Kunene River is low in water flow and the
Ruacana cannot be operated at full load. This scenario has rendered the countrys electricity supply situation critical as the future of
electricity supply is almost entirely at the mercy of external policy and decision makers. Namibia has an installed capacity of about
507.5 MW, but the actual output currently is only about 27% due to various technical and natural challenges such as the ageing of
the Van Eck power plant, the low water flow in the Kunene River due to poor rainfall, amongst others. Currently, NamPower meets
the national demand for electricity by generating at Ruacana Hydropower plant (27%); imports from ZESA (31%) imports from ZESCO
(12%), imports from Eskom (12%) and imports from Aggreko (18%).
As far back as 2006, the Regulator commissioned a study whose outcome recommended a number of demand side management
(DSM) options for Namibia. Major DSM initiatives that have been implemented to date include the distribution of energy saving bulbs
(CFLs and LEDs), replacement of electric geysers with solar water heaters, the use of ripple control of electric geysers by distributors (City
of Windhoek, Walvis Bay Town/Erongo RED), and Time of Use Tariffs.
Namibia is faced with the problem of not fully utilizing the multi-billion dollar Caprivi/Zambezi HVDC Transmission Link/interconnector
to the countrys benefit due to lack of generation and transmission capacity in northern neighbouring countries (Zambia, Angola and
Zimbabwe) and in Namibia itself.
The short-term critical supply (STCS) initiatives identified by the utility include the following:
a)
NamPower generation plants (refurbishment of Van Eck, and replacement of runners at Ruacana);
These Short Term Critical Supply initiatives are expected to be implemented during the period running up to 2017. It must be noted
that most of the STCS projects have serious financial implications as they come at very high cost and hence cannot be sustainable as
long term supply options.
The Kudu Gas Power Plant is expected to be completed and commissioned by 2018, generating about 800MW, 400MW of which will
be used inside the country with the remaining 400MW earmarked for export to neighbouring countries through their SAPP member
utilities.
Many of the projects implemented during the review period also seek to contribute to security of supply and to mitigate the impact
of shortages in the immediate- to medium-term. However, the National Integrated Resource Plan (NIRP) project currently under way
will investigate and propose least cost supply options that go beyond the immediate and medium terms. The NIRP project will elevate
power generation and security of supply from utility level to the national agenda status.
It is vital that the concept of least cost is understood in the appropriate context, taking cognisance of the clear distinction between
15
financial cost which strictly looks at the dollar value per unit and economic cost which transcends a broader spectrum encompassing
opportunity cost, socio-economic and other factors affecting general well being of the nation and its inhabitants.
In our assessment of feasible options, it is important to bear in mind that options that could look financially attractive in the immediate
term may not necessarily be economically lucrative in the long run.
15
to achieve the efficient, reliable, sustainable and orderly development and operation of the electricity supply industry and
electricity infrastructure in Namibia;
b) to ensure that the interests and needs of present and future electricity supply industry customers are safeguarded and met, having
regard to the governance, efficiency, effectiveness and long-term sustainability of the electricity provision industry within the
broader context of economic energy regulation in Namibia;
c)
16
g) to facilitate a fair balance between the interests of customers, licensees, investors and the general public in the electricity supply
industry.
The Electricity Bill was subjected to extensive stakeholder consultations facilitated by the Electricity Control Board. The Bill is currently
undergoing final comments especially around aspects of the electricity market model before it is submitted to the Minister of Mines &
Energy, to commence with the legislative promulgation process. The aforementioned will take the form of consultations with the Office
of the Attorney General, Cabinet Committee on Legislation and the Legal Drafters under the Ministry of Justice.
The Namibia Energy Regulatory Authority Bill mainly focuses on provisions regarding the establishment and operation of the to-beestablished Namibian Energy Regulatory Authority (NERA). The objects of the Bill are to describe NERAs roles and responsibilities, i.e.
h) regulate electricity, downstream gas including gas pipelines and storage facilities;
i)
j)
k)
l)
NERA, as the ECBs successor, will thus have a broader mandate and includes additional energy resources that are to be regulated. The
Energy Regulatory Authority Bill was also subjected to extensive stakeholder scrutiny following a broad consultative process and is
now at an advanced stage of completion. Submission of the Bill to the Minister of Mines and Energy is awaiting the finalisation of the
Electricity Bill. The ECB is positive that both the Electricity Bill and the Energy Regulatory Authority Bill as well as the operationalisation
of NERA will be finalised during the next review period.
Regulatory Instruments
In the year under review the ECB Board approved various subordinate legislative instruments, including Technical and Economic Rules,
Distribution Infrastructure Standards, and the Optimised Maintenance Guidelines for the Distribution Sector. The requisite legal scrutiny
and promulgation was also undertaken. In addition, an increase of the ECB levy from 1.406c/kWh to 1.5c/kWh was approved.
promote and maintain fair competition and a stable environment within the electricity sector;
promote co-operation and co-ordination between the parties when dealing with cases of anti-competitive behaviour, as well as
to facilitate the treatment of mergers and acquisitions within the electricity industry;
17
d) undertake any joint investigations, market enquiries or research studies in the electricity industry as the parties may agree;
e) ensure that the ECB exercises primary authority to set prices and tariffs, enforce performance and compliance and take appropriate
steps in case of non-performance and establish conditions within the electricity industries and the Commission exercises primary
authority to detect and investigate the alleged prohibited practices not covered by the Electricity Act and to review mergers within
the electricity industry, and
f)
improve the understanding of the roles of both the NCC and ECB, by undertaking studies on the effectiveness of competition within
the electricity industry.
17
18
Tender documentation for the procurement of 30 MW solar photovoltaic (PV) generation capacity for Namibia;
j)
k)
l)
Comments and feedback received during such consultative sessions form part of the critical inputs that are taken into account when
arriving at most of the ECBs regulatory decisions. In this way, topics such as the NamPower tariff adjustments, processing of license
applications, and the development of subordinate legislation such as rules, standards, codes and regulations were informed and
influenced by inputs provided by stakeholders.
The ECB endeavours to provide a public information and empowerment drive on all matters relating to the regulation of the electricity
industry. To this end, the ECB used various interventions to communicate directly and indirectly with stakeholders. These initiatives
included, amongst others, the regular updating of the ECBs website, presentations at industry forums such as the Electricity Supply
Industry Forum, the presence and contribution to numerous media events, including radio and television programs, as well as specific
publications.
In addition, the ECB monitors the daily print and electronic media for energy-related coverage in general, and specifically those of
relevance to the countrys electricity sector. The most significant news coverage in the period under review related to electricity tariffs
and the security of supply. In most cases, comments and coverage of issues related to the activities undertaken by the ECB were
reported factually and were neutral.
19
and local and regional authorities received funding and donations from the ECB Social Responsibility Fund.
ECB currently supports a number of students pursuing their studies in various fields at tertiary institutions in Namibia and the SADC
region.
Human Resources
19
Staffing
Recruitment, Selection and Turnover
The ECB operates in a highly technical industry and requires
specialist skills. Employee competence, passion and commitment
are professional attributes that are encouraged at all levels, and
ensure that key personnel can be retained and recruited. This is
reinforced by the ECBs continuous commitment to attract and
retain a committed, competent and motivated workforce, which is
achieved by appropriately rewarding performance and recognizing
as well as promoting talented staff. During the period under review,
only one termination of employment took place.
Staff Numbers
The figure below depicts the number of staff per functional area. Of
a total staff complement of 24, the CEOs Office employs 4 persons,
while 10 persons each are working in the Finance & Administration
and Regulation sections respectively.
Staff Turnover
Over the past five years, the ECBs staff numbers increased, mainly in response to requirements brought about by the restructuring of
the Namibian Electricity Supply Industry. As shown in the table below, the ECBs staff turnover rate per year averaged over the past five
20
years stands at some 7% of total staff employed. This is to be compared to a Southern Africa staff turnover rate of some 10% per year,
which indicates that current staff attrition rates at the ECB compare favourably with regional experiences.
2008
2009
2010
2011
2012
Total Staff
17
19
19
22
24
Staff turnover
6%
0%
16%
9%
4%
% Turnover
Table 1: Staff Turnover
Promotion
During the period under review one employee was promoted from a specialist portfolio to a managerial position.
Skills development;
d) Tertiary Studies.
d) RERA-SATH training.
The ECBs approach to skills development focuses on addressing the most pertinent in-house needs and requirements while ensuring
that capacity building takes place across all levels throughout the organisation.
Employee Wellness
The ECBs employee wellness strategy applies a holistic approach which recognizes that staff are human beings and not merely
workers. Various employee wellness and staff support programs are in place. For this period under review, the ECB introduced a
medical surveillance programme as part of the organisations comprehensive health and wellness policy. This implied that all staff
underwent baseline medical assessments, which underpin the preventative health care drive to improve productivity and reduce
employee absenteeism. Other wellness initiatives included, amongst others, teambuilding, commemoration of the Worlds Aids Day,
and supporting the cancer awareness campaign by Bank Windhoek.
Information Communication
Technology
The ECBs strategic plan identifies two ICT initiatives that are to be continuously undertaken, these are the information needs assessment;
21
IT Usage Policy, which provides guidelines for the use of the ECBs computing facilities;
b) Information Security Policy, which addresses the security of the ECBs data and information systems; and
c)
IT General Control Policies, which is to ensure the structured development, implementation and maintenance of all IT applications
used at the ECB.
21
Economic Regulation
Tariffs
The regulation of electricity tariffs is one of the principal activities of the ECB. Tariff setting is done in accordance with the White Paper
on Energy Policy of 1998, which states that tariffs should be cost reflective, reflect the long-run marginal cost of supply, and be based
on sound economic principles.
Electricity tariffs charged by utilities are all regulated. Tariffs are based on a utilitys revenue requirement, including a regulated return
on assets used for electricity generation, transmission, distribution and supply. The tariff methodology applied by the ECB is known as a
cost plus methodology. This implies that the revenue requirement (i.e. the cost) of a utility plus a regulated return (i.e. the weighted
average cost of capital) determines the end-user tariff.
The revenue requirement includes all allowable costs of the utilities to cover the cost of supply including the primary energy, energy
imports, bulk electricity purchases, operating and maintenance costs, overheads, asset-related costs, and investment costs. In
determining the Namibian electricity tariff levels, the ECB consults and takes into consideration the expectations of key stakeholders
including the Government, private sector and consumers. It also assesses the likely impacts that tariffs may have on the end-consumers
and the Namibian economy at large before approving tariffs. Each utility needs to have its tariff levels approved by the ECB Board before
they may be implemented, and this process repeats itself on an annual basis.
Approved tariffs
For the financial year 2012/2013, the ECB granted NamPower an effective average tariff increase of 17.20% which includes a 2% long-
22
run marginal cost (LRMC) contribution. The LRMC portion was awarded to ensure that NamPower remains on the LRMC price path and
enable the utility to build sufficient reserves to protect the Namibian consumer against future price shocks.
Figure 2 depicts the projected electricity price path between 2011/2012 and 2019/2020.
Distribution utilities and Local Authorities were granted tariff increases according to their specific revenue requirements.
Over the past years, the ECB has ensured that electricity tariffs are consistent with and reflective of the following three main regulatory
objectives:
a)
Equitably rewarding of investors (recovery of allowable cost of supply plus the regulated rate of return) while keeping prices
affordable to consumers;
b) Ensuring quality of supply and service, taking cognisance of different quality standards and associated costs; and
c)
Maximising operational efficiency through restructuring and performance evaluation and monitoring.
LOCAL GENERATION
MWh
% Energy Supply
reflect the long- run marginal cost of supply. The LRMC includes
1 236 597
35%
Van Eck
84 110
2%
Paratus
20
0%
Anixas
8 270
0%
1 328 997
38%
23
MWh
% of Energy supply
Eskom
649 037
19%
Zesco
433 501
12%
ZESA
1 049 669
30%
45 600
1%
2 177 807
62%
Aggreko
Total imports
23
Local Generation
2008/09
2009/10
2010/11
2011/12
2012/13
versus Imports
Percentage Energy
Local Generation
40%
35%
37%
49%
38%
Imports
60%
65%
63%
51%
62%
Percentage Cost
a)
b)
c)
Local Generation
22%
46%
35%
36%
34%
Imports
78%
54%
65%
64%
66%
d)
0.32
0.43
0.36
0.28
0.45
Imports
0.52
0.40
0.38
0.47
0.55
24
As agreed to with relevant ESI stakeholders, the LA Surcharge is a fixed dollar amount per year, and has remained so over the past 7
years. Currently, the LA Surcharge is added to the electricity tariffs and collected by the REDs on behalf of the relevant LA/RC.
In the year under review, the following projects as identified in the ECBs current Strategic Plan were implemented:
25
Stakeholder workshops and consultations were conducted at the beginning of the year 2013. The ECB will conduct an economic impact
assessment before the rules are promulgated, which is expected to take place at the end of 2013.
26
Review and calibrate the model to take Namibias current and forecast economic climate into account;
Assist the ECB in modelling the impact of NamPowers generation and transmission tariff on the Namibian economy; and
d) Align the model with the demand forecast from the National Integrated Resource Plan (NIRP).
The updated model will be used for the tariff review in the financial year 2013/2014, and is expected to be completed in May 2013.
27
Technical Regulation
Quality of Supply Profile for the Namibian ESI
The ECBs annual report of 2011/2012 reported on the Namibian ESI quality of supply profile, focusing mainly on data from the REDs
and large power users. In the period under review, Local Authorities became involved in the Quality of Supply project. This broadened
the scope of the original project, and necessitated additional capacity building in order to generate Quality of Supply reports.
Quality of Supply reports are important to understand and manage supply risks, and enhance the visibility and appreciation of aspects
relating to power quality management. The following comparative analysis illustrates the Quality of Supply reports for Okahandja and
Rehoboth for the month of February 2013, and emphasises the importance of power quality management in Local Authorities.
Quality of Supply for Local Authorities the Case of Okahandja and Rehoboth
The Quality of Supply reports focus on the assessment of four power quality parameters, namely
a)
b) supply reliability;
c)
d) voltage unbalance.
Okahandjas power quality was assessed at the towns NamPower 11 kV intake, while NamPowers 11kV Dr Lemmer intake was where
the Rehoboth Town Councils power quality was recorded. Both assessments were undertaken in February 2013.
28
Applicable Standards
The standards used for the assessment are the South African National Rationalised Standards (NRS) 048 and the International Electrotechnical Commission (IEC) 61000 standard.
Dip Type S
Dip Type T
Dip Type X1
Dip Type X2
Dip Type Y
18
Voltage Swell
Table 4
Events in Okahandja
Duration in Okahandja
Events in Rehoboth
Duration in Rehoboth
Sustained interruption
Interruption Type
5 020 s
Momentary interruption
271 s
75 s
Table 5
Voltage Magnitude
The magnitude of supply voltage is expressed as a percentage of the ideal, declared root-mean-square voltage as defined in the above
standards. The following (Table 6) values were recorded:
Compatibility
Compliance
Worst
Non-
Compliance
Worst
Non-
level Rehoboth
assessment
compliance
110.0%
110.2%
level
assessment
compliance
Okahandja
Okahandja
Okahandja
110.0%
103.2%
0.0%
Criterion
Max 30 min
Rehoboth
3.6%
weekly value
Table 6
Voltage Unbalance
Voltage unbalance quantifies the contribution of negative sequence voltages as a percentage of positive sequence voltages as per the
above standards. Both sites were found to be 100% compliant during the assessment period.
Monitoring and enforcing compliance with the Quality of Service Standards was mainly done by addressing customer complaints. The
main concerns expressed were power outages due to network faults, quotations, connection charges and accounts / billing. Details on
complaints handling issues are covered under the section describing Regulatory Support Services.
Customer Complaints
The statistical analysis of customer complaints in the period under review reveals that some 80% of all concerns were related to noncompliance with the Quality of Service Standards.
Table 7 itemises the various categories of complaints that were received, specifying the relevant performance indicator, associated
activities and minimum standards that must be met at all times.
29
Performance Indicator
Activities
Guaranteed Standards
feasibility studies;
Quotation time
applications;
quotations/estimates;
acceptance of quotation and payment;
design;
construction (including certificate of compliance);
commissioning and decommissioning;
supply contract between licensee and customer;
Credit Metering
30
interruptions
and Requests
Between August 2012 and June 2013, the SWC conducted several stakeholder consultations locally as well as in South Africa, focusing
on institutional capacity building, localisation and the harmonisation of the wiremens licensing process.
A strategic planning workshop was scheduled for 6-7 May 2013 to map out the direction for the SWC, define the Committees Terms of
Reference, and identify a road map for an interim and a longer term solution.
It was found necessary to develop an electricity audit manual and inspection guidelines in order to implement technical audits in a
structured and coherent manner.
31
ECB commissioned a project to assess the availability and reliability of power supplies to Namibian hospitals and other critical facilities.
Inspections conducted as part of the project focused mainly on the:
a)
security, availability and reliability of power supplies from the distribution grid as well as from uninterruptible power supplies
(UPS) and standby generation;
availability and implementability of structured maintenance processes and associated operational capacities;
an assessment of the state of compliance of safety, regulatory, statutory and best practice maintenance and operational procedures.
During the period under review, the ECBs technical team visited three regions, namely Hardap, Karas and Erongo, where critical service
facilities were inspected. Out of a total of 13 regions, 11 were fully covered. Outstanding inspections of the Khomas and Kunene regions
are scheduled for completion before December 2013.
31
d) Dissemination of solar water heaters to reduce household electricity consumption and that of Government buildings; and
e) the use of efficient cooking appliances using biomass;
For the Government sector:
f)
g) Enforcing the Cabinet Resolution on the use of solar water heaters in Government buildings;
For the commercial sector:
h) An awareness creation programme;
i)
j)
For municipalities:
k)
l)
32
33
a)
High-voltage interconnectors should be established to connect to neighbouring countries to increase the regional trade in electricity;
d) Environmental and socio-economic sustainability should be promoted in all activities taking place in the sector; and
e) Electricity prices should be based on sound economic principles and reflect the long run marginal cost of supply.
Recognising that neither the 2010 demand nor energy targets were met, the Government resolved to enhance the security of supply
by developing a National Integrated Resource Plan (NIRP). The development of the NIRP commenced on 1 July 2011, and scheduled
to be completed by 30 April 2013.
Phase 3: Definition and Evaluation of Generation Options, Import Sources and Demand Side Management Options
33
Reliability criteria: Loss of Load Probability (LOLP) (5 days/year from 2012 to 2020, 2 days/year for the remaining years)
34
Figure 4
Grid Code
In 2012, the Transmission Grid Code was presented for review by stakeholders. Regular review is necessary as new developments
continuously shape the sector; in recent times the integration of renewable energy technologies became more important, which was
addressed in the last review.
In its updated form, the updated Transmission Grid Code now comprises the following seven components:
a)
Preamble
b) Governance code
c)
Network code
Metering code
Safety Code
The Namibia Electricity Safety Code (NESC) was first gazetted in 2010, and re-gazetted in 2011. Since the target implementation date of
31 October 2012 it is with licensees for implementation. The ECB will monitor the effectiveness of the implementation process through
various stakeholder engagement activities.
The Electricity Supply Industry (ESI) relies on sound infrastructure installations and consistent maintenance. Consequently, the ECB
commissioned a project to develop guidelines on best maintenance practices for the distribution sector. In December 2012, the ECB
Board approved the optimised maintenance practices document. Currently, preparations for the submission and presentation to the
Minister of Mines and Energy are under way.
Audit Manual
The ECB recognises the value of promoting economic and technical efficiency through the implementation of incentive-based regulation,
the use of performance benchmarks and improved enforcement of relevant standards and regulations. Here, a particular focus is to be
placed on the improvement of supply quality and reliability, promotion of security of supply and increased access to electricity services.
In line with these objectives, the ECB developed an Audit Manual and Inspection Guidelines, to guide technical audits that are carried
out to ensure the compliance of licensed entities with current standards and guidelines. The Audit Manual is to be used by authorised
inspectors as prescribed by the relevant regulatory policy or legislation.
35
36
Licensing
New Licenses
In the period under review, the following new licenses were granted:
a)
Evofield Energy Holdings (Pty) Ltd was granted a generation license for a 30MW solar PV power plant that is to be erected at
farm Safier No. 62 in the Karibib district of the Erongo Region. The license stipulates a phased implementation over three years
at 10MW per year.
b) Ark Industries Namibia (Pty) Ltd was granted a generation license for a 16MW biogas power plant that is to be erected at Rehoboth.
c)
Namibia Breweries Ltd was granted a generation license for a 1MW solar PV power plant for own consumption at its production
facility in Windhoek.
Amended Licenses
In the period under review, the following special conditional generation licenses were amended:
a)
Bush Energy Namibia (Pty) Ltd (C-BEND) had its licence amended, to extend the period of validity of special conditions to 30 April
2013, which also includes the name change of the company from Bio Energy Namibia to Bush Energy Namibia.
b) GreeNam Electricity (Pty) Ltd had its licence amended, to extend the period of validity from 20 to 25 years.
Renewed Licenses
In the period under review, the following licenses were renewed:
a)
43 supply licenses
b) 42 distribution licenses
37
c)
d) Local Authority distribution and supply licenses in areas initially earmarked for Southern RED and Central RED were renewed for
another year, as both REDs have not been established yet.
Paramount Infrastructure Development (Pty) Ltd applied for a 22MW CSP generation license for a power plant to be erected at a
farm in the Khorixas district of the Kunene Region.
b) Africa Energy Corporation (Pty) Ltd applied for two (2) 4.9MW solar PV generation licenses for a plant to be erected at farm 38 in
Walvis Bay with the intention to sell the energy to a private off-taker.
c)
OKA Investment (Pty) Ltd applied for a 20MW solar PV generation license with the intention to sell the energy to a private offtaker.
d) Erongo Diagram Investment (Pty) Ltd applied for a 5MW solar PV generation license with the intention to sell the energy to a
private off-taker.
e) InnoSun (Pty) Ltd applied for six (6) solar PV generation licenses for the purpose of wheeling the energy generated at the various
facilities to their clients. Applications were submitted for the following sites: 10 MW for Omburu 1, 20MW for Omburu 2, 10MW for
Osona, 7.5MW for Mariental, 2.5MW for Seeis and 2.5MW for Omaruru.
37
Licensee
Type
Size
Date Issued
Validity period
Comment
(years)
CBEND (Bush Energy Namibia)
Biomass
250 kW
1-May-10
Commercial
Solar
30MW
1 June-11
25
operation to
Wind
44 MW
1-Apr-07
22
start
300 MW
4-Apr-08
25
700MW
1-Nov-07
25
due
(pulverised)
Progress Report
16MW
1 Jan-13
25
210 (68) MW
1-Jun-07
20
Ltd
Namibia International Mining Diesel CCGT
Company (NIMC)
38
and not
Wind
50 MW
1-Nov-09
20
Wind
60 MW
1-Mar-10
20
VTB Capital
Small Hydro
30 MW
15-Jul-07
20
License expired
renewed
Industry Analysis
Licensing Compliance
As part of the compliance monitoring undertaken by the ECB, several inspections were conducted across the country. Although all
licensees comply with the minimum Quality of Supply and Service Standards, further improvements are needed to improve the overall
levels of compliance by licensees.
Customer service, customer awareness, and the communication between licensees remain industry-wide challenges. The ECB intends to
embark on a study to assess how compliance enforcement can be operationalised, and how rewards and incentives can be integrated
into operational procedures.
Customer Complaints
In accordance with the Electricity Act of 2007 (Act No. 4 of 2007), licensees are obligated to apply best practice principles to ensure highquality customer service levels. The ECB uses the Quality of Service Standards, Safety Code, Grid Code, Technical and Economic Rules and
Maintenance Practices as instruments to monitor and evaluate customer service levels across the industry.
During the period under review, the ECB received various electricity-related complaints from customers and licensees. The majority
of these complaints were addressed and resolved during the reporting period. The following categories of complaints were recorded:
Connection Charges: numerous complaints were received, these were resolved through direct consultations and
intervention by the ECB. Guidelines for connection charges were developed by the ECB and are relevant to all licensees.
Power Outages: during the rainy season, the ECB received numerous complaints. Select site inspections were carried out
by the ECB, and the necessary remedial actions were undertaken by affected licensees.
Billing and Accounts: two complaints were received during the period under review. After consultations with the parties
concerned, all issues were clarified.
2011/2012
2010/2011
2009/2010
3 Yr Average
ERONGO RED
2011/2012
2010/2011
2009/2010
3 Yr Average
CENORED
2011/2012
2010/2011
2009/2010
Benchmark
39
Key
Performance
Indicators
NORED
Financial Indicators
ROA
1%- 7%
4.2%
5.6%
5.9%
5.2%
2.6%
2.0%
1.1%
1.9%
10.54%
22.71%
7.53%
13.6%
Operating
Margin
17%
10%
14%
18%
14.1%
6%
4%
2%
3.9%
10%
21%
16%
15.7%
Current Ratio
>1
2.71
2.46
2.37
2.51
0.89
0.77
1.14
0.93
1.65
1.59
2.37
1.87
Quick Ratio
>1
2.25
2.41
2.27
2.31
0.77
0.63
0.94
0.78
1.36
1.42
2.27
1.68
81%
86%
86%
84.6%
84%
85%
85%
84.6%
93%
95%
92%
93.7%
58
59
63
60
45
51
42
46
81
90
55
76
Technical Indicators
Energy
Conversion
Efficiency
89- 97%
Commercial Indicators
Debtor days
32
70days
Operating Cost
/Sales
25-40%
20%
18%
26%
21.5%
24%
25%
36%
28.4%
15%
16%
42%
24.6%
0.3-1.3%
1.7%
1.1%
0.0%
0.9%
1.0%
0.5%
0.3%
0.6%
0.5%
0.3%
0.4%
0.4%
Efficiency Indicators
Customers/
Employee
137-555
332
347
364
348
127
111
114
117
137
123
286
182
Energy Sold /
Employee kWh
2400-
1471
1701
1620
1598
1013
855
891
920
1561
1466
1371
1466
0.57
0.67
0.81
0.68
0.61
0.70
0.99
0.76
0.56
0.66
0.78
0.67
AVG Power
Purchasing
Cost (N$/kWh)
9600
39
The electricity distribution industry maintained viability over the financial period 2011/2012. Based on the performance benchmarks
imposed by the ECB, the results obtained are indicative of a maturing sector.
Erongo RED recorded the greatest performance improvements amongst the REDs. The company maintained a healthy financial position,
significantly decreased its debtor days, and maintained energy losses at 6.3%. The company also recorded the lowest average power
purchasing cost at N$ 0.67/kWh.
Of concern is the performance of CENORED. The company has the greatest number of exNamPower customers of all REDs in Namibia,
and its distribution area is characterised by its sparse population which implies high costs and low efficiencies. Energy losses 15% were
recorded, and the growth in consumption remains a concern to the ECB.
2011/2012
2009/2010
2010/2011
3 Yr Average
2011/2012
2010/2011
2009/2010
Benchmark
Key
Performance
Indicators
Financial Indicators
40
ROA
1%- 7%
18.2%
8.0%
-4.1%
7.3%
12.76%
4.81%
7.84%
8.5%
Operating
Margin
17%
22%
4%
-2%
8.0%
12%
5%
8%
8.5%
Current Ratio
>1
1.85
2.94
2.72
2.50
1.74
1.36
1.73
1.61
Quick Ratio
>1
1.58
2.41
2.09
2.03
1.66
1.29
1.63
1.53
75%
78%
90%
81%
96%
92%
91%
93.0%
Technical Indicators
Energy
Conversion
Efficiency
89- 97%
Commercial Indicators
Debtor days
32
70days
103
55
54
71
37
45
31
37
Operating Cost
/Sales
25-40%
78%
38%
40%
52%
29%
32%
31%
30.8%
0.31.3%
0.3%
1.1%
1.2%
1%
0.2%
0.2%
0.2%
0.2%
Efficiency Indicators
Customers/
Employee
137-555
229
232
260
240
107
112
111
110
Energy Sold/
Employee kWh
2400-
1546.84
1670.59
1955.79
1.724
1306.77
1304.44
1333.31
1.315
0.71
0.78
0.91
0.80
0.63
0.70
0.79
0.71
AVG Power
Purchasing
Cost (N$/kWh)
9600
SELCO has recorded notable improvements in its financial and technical performance. The company decreased energy losses to 10%,
noting that the distribution area is sparsely populated. This was mainly achieved by implementing strict maintenance and operational
practices and applying metering management and theft control measures.
Oshakati Premier Electric (OPE) provides electricity to the Oshakati municipal area. The company has maintained commendable
performance in a regulated industry, meeting benchmarks targets on the majority of the industry-wide performance indicators.
3 Yr Average
2011/2012
2010/2011
2009/2010
3 Yr Average
Okahandja Municipality
2011/2012
2010/2011
2009/2010
Benchmark
Key
Performance
Indicators
City of Windhoek
Technical Indicators
Energy
Conversion
Efficiency
89- 97%
90%
93%
92%
91.9%
76%
79%
79%
78.0%
Efficiency Indicators
137-555
464
411
408
427.40
190
216
211
206
Energy Sold/
Employee kWh
2400-
5.949
5.598
5.431
5.659
1.217
1.273
1.275
1.255
0.54
0.65
0.78
0.66
0.59
0.69
0.84
0.70
9600
3 Yr Average
2011/2012
2009/2010
3 Yr Average
Gobabis Municipality
2011/2012
2010/2011
Benchmark
2009/2010
Mariental Municipality
2010/2011
AVG Power
Purchasing
Cost (N$/kWh)
Key
Performance
Indicators
41
Customers/
Employee
Technical Indicators
Energy
Conversion
Efficiency
89- 97%
89%
86%
87%
87.3%
93%
0%
93%
62%
Efficiency Indicators
Customers/
Employee
137-555
Energy Sold/
Employee kWh
24009600
0.58
0.68
0.83
0.70
0.58
0.83
AVG Power
Purchasing
Cost (N$/kWh)
41
3 Yr Average
2011/2012
2010/2011
2009/2010
3 Yr Average
GOCHAS
2011/2012
2010/2011
2009/2010
3 Yr Average
AROAB
2011/2012
2010/2011
2009/2010
Benchmark
Key
Performance
Indicators
LEONARDVILLE
Technical Indicators
Energy
Conversion
Efficiency
89- 97%
96%
71%
75%
80.7%
79%
76%
78%
77.9%
84%
81%
78%
81.2%
Efficiency Indicators
Customers/
Employee
137-555
Energy Sold /
Employee kWh
24009600
1458.9
1471
1701.3
1543.73
1247.92
1013.49
854.68
1038.7
1789.46
1561.48
1466.49
1605.81
0.88
0.83
0.92
0.88
0.71
0.81
0.90
0.81
0.74
0.80
0.88
0.80
AVG Power
Purchasing
Cost (N$/kWh)
2011/2012
2010/2011
Benchmark
2009/2010
NAMPOWER DISTRIBUTION
Key
Performance
Indicators
42
Financial Indicators
Current Ratio
>1
4.98
3.73
3.38
4.03
Quick Ratio
>1
4.75
3.55
3.27
3.86
89- 97%
87%
87%
86%
87%
of sales.
Technical Indicators
Energy Conversion
Efficiency
Commercial Indicators
Debtor days
32 70days
114
131
102
115
25-40%
9%
11%
10%
10%
Efficiency Indicators
Customers/ Employee
137-555
652.00
665.50
450.17
589.22
Energy Sold/
Employee kWh
2400-9600
0.48
0.49
0.36
0.44
FINKENSTEIN
2010/2011
2011/2012
2 Yr Average
4.3%
4.2%
4.2%
-14.3%
-13.4%
-13.9%
92.9%
77.9%
85.4%
Operating
Margin
17%
21%
14%
17.5%
-182.3%
-34%
-108.3%
33%
12%
22.5%
Current Ratio
>1
0.16
2.58
1.37
1.18
1.18
1.18
3.83
1.36
2.60
83%
84%
84%
89%
76%
82%
90%
90%
2011/2012
Benchmark
2 Yr Average
1%7%
2010/2011
ROA
Key
Performance
Indicators
2 Yr Average
2011/2012
SWART RAND
2010/2011
KHOMAS POWER
Technical Indicators
2540%
65%
49%
57%
27%
23%
25%
106%
88%
97.4%
Efficiency Indicators
Customers/
Employee
8997%
Commercial Indicators
Operating Cost
/Sales
Financial Indicators
Energy
Conversion
Efficiency
137555
AVG Power
Purchasing
Cost (N$/kWh)
18
21
19
17
17
17
0.00
1.13
1.31
1.22
1.03
1.09
1.06
1.18
1.11
1.15
43
Transmission Overview
The results obtained from NamPowers transmission business
indicate a healthy transmission sector. Liquidity ratios are well3 Yr Average
2011/2012
2010/2011
2009/2010
Benchmark
Key
Performance
Indicators
Financial Indicators
Current Ratio
>1
4.98
3.73
3.38
4.03
Quick Ratio
>1
4.75
3.55
3.27
3.86
increasing cost.
NamPowers transmission business recorded an average load
Technical Indicators
Load Factor
Context
53%
54%
55%
54%
Network Utilisation
Factor
Tracking
3.2%
3.5%
2.2%
Energy Conversion
Efficiency
84%-95%
93%
88%
88%
90%
25-40%
11%
9%
10%
10%
Commercial Indicators
Operating Cost /Sales
43
Generation Overview
3 Yr Average
2011/2012
Plant Availability
Tracking
100%
112%
87%
100%
Energy Conversion
Efficiency
84%-95%
51%
50%
65%
55%
Benchmark
2010/2011
2009/2010
Key
Performance
Indicators
Technical Indicators
4th turbine.
Efficiency Indicators
Plant Utilisation Factor
87-90%
59%
59%
76%
65%
Employees/MW
installed Capacity
0.67-2.06
0.24
0.23
0.23
0.23
3 Yr Average
2010/2011
Plant Availability
Tracking
100%
101%
92%
97.3%
Energy Conversion
Efficiency
84%-95%
3.7%
2%
1%
2.3%
87-90%
5.2%
2.1%
1.5%
2.9%
Benchmark
2011/2012
2009/2010
Key
Performance
Indicators
Efficiency Indicators
Plant Utilisation Factor
Technical Indicators
0.14%.
Technical Indicators
92%
97%
94.2%
84%- 95%
88%
83%
85.7%
87-90%
1.13%
1.07%
1.1%
Employees/MW
87%-90%
145%
145%
145.5%
99%
98%
100%
99%
Efficiency
84%-95%
119%
162%
12%
98%
Efficiency Indicators
1.39%
1.91%
0.14%
1%
Employees/MW
installed Capacity
0.67-2.06
0.75
0.75
1.33
0.94
3 Yr Average
Tracking
Energy Conversion
Tracking
87-90%
2011/2012
Plant Availability
Energy Conversion
Efficiency
2010/2011
Technical Indicators
Plant Availability
Efficiency Indicators
Benchmark
3 Yr Average
2011/2012
2010/2011
2009/2010
Benchmark
Key
Performance
Indicators
Key
Performance
Indicators
44
installed Capacity
45
45
Figs 7 and 8 shows Namibias electrification rate as well as the consumption per capita in comparison to other countries. From the
two graphs, one can clearly see that Namibia needs to double its efforts in order to achieve its Vision 2030 objectives. During the next
financial year, the ECB will embark on a project to develop a mechanism to increase the electrification rate throughout the country.
46
Figure 9 shows the average electricity price path since 2006/7. The gradual price increase over the past years is evident. Of note are
the steep price increases since 2009/10. The average retail price of electricity has more than doubled in the last six years in Namibia.
47
47
Figure 10 depicts the annual average percentage increase of electricity prices for each distribution area. Average price increases have
generally been less than 20% per year.
Figure 11 shows the annual peak demand for electricity in Namibia, excluding the demand by Skorpion Zinc Mine, and the installed
local generation capacity. As is evident, the peak demand requirement outstrips the available supply capacities since 2006.
48
49
Completed
Implementation
50%
Implementation to commence in
10%
10%
100%
30%
100%
10%
MIS management
100%
100%
100%
20%
50%
80%
90%
90%
60%
10%
10%
10%
100%
100%
20%
System operations for QoS standards for all REDs & CoW
80%
100%
100%
49
Table 20
During the period under review, the ECB participated in a number of regular RERA activities, including the attendance of meetings,
capacity building training sessions, and special events. In addition, the ECB participated in all scheduled meetings of the Economic,
Legal and Technical Regulation Subcommittees, the Portfolio Committee Meetings as well as the Annual General Meeting. The ECB was
also actively involved in the planning, organisation and hosting of RERAs 10th anniversary celebrations which took place in Namibia
in November 2012.
50
In Africa, most of the countries are either operating a vertically integrated or single buyer electricity market models, with little or no
competition in the generation or the wholesale segment of the market.
51
52
53
Board member
Board member
Auditors responsibility
Our responsibility is to express an opinion on these annual financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance whether the annual financial statements are free from material
misstatement.
54
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual financial
statements. The procedures selected depend on the auditors judgement, including the assessment of the risks of material
misstatement of the annual financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entitys preparation and fair presentation of the annual financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the annual financial statements present fairly, in all material respects, the financial position of the Electricity
Control Board as at 31 March 2013, and of its financial performance and its cash flows for the year then ended in accordance
with International Financial Reporting Standards and in the manner required by the Electricity Act (No 4 of 2007).
55
Results
The results of the Board are fully set out in the attached annual financial statements.
Dividends
No dividends have been paid or declared during the year (2012: Nil).
(Chairperson)
56
Postal address:
No 8 Bismarck Street
P O Box 2923
Windhoek Windhoek
NAMIBIA NAMIBIA
Subsequent Events
The Board members are not aware of any fact or circumstance, which occurred between the date of the financial statements
and the date of this report, which might influence an assessment of the Boards state of affairs and require disclosure in these
financial statements.
Going Concern
The Board earned a surplus of N$ 13 203 981 (2012: N$ 13 083 980) and a surplus of N$ 1 872 733 is forecasted for the
2013/14 financial year. The Board has also accumulated sufficient surplus to absorb any future losses and together with
future revision to the levies, these will ensure the operational existence of the Electricity Control Board and this confirms the
appropriateness of the going concern basis in the preparation of the annual financial statements.
Notes
2013
2012
N$
REVENUE
N$
38 844 413
Other income
32 463
17 976 161
19 205 797
Operating costs
8 142 708
12 759 743
Interest received
924 248
324 237
9 066 956
13 083 980
Taxation
9 066 956
13 083 980
4 137 025
13 203 981
13 083 980
57
Notes
2013
2012
N$
N$
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
7 526 406
3 709 435
CURRENT ASSETS
38 107 698
23 858 358
4 021 741
1 734 063
34 085 957
22 124 295
TOTAL ASSETS
45 634 104
27 567 793
58
33 500 164
20 296 183
Revaluation reserve
4 137 025
Accumulated funds
29 363 139
20 296 183
NON-CURRENT LIABILITIES
Finance lease
10
CURRENT LIABILITIES
12 581
12 133 940
7 259 029
9 701 636
4 931 449
11
Finance lease
10
35 879
23 649
12
2 396 425
2 303 931
45 634 104
27 567 793
Revaluation Accumulated
Reserve
Funds
Total
N$ N$ N$
7 212 203
7 212 203
13 083 980
13 083 980
20 296 183
20 296 183
9 066 956
9 066 956
4 137 025
4 137 025
4 137 025
29 363 139
33 500 164
59
Note
2013
2012
N$
CASH FLOWS FROM OPERATING ACTIVITIES
12 029 727
N$
13 920 702
36 556 735
37 073 916
11 105 479
13 596 465
Interest received
17
924 248
324 237
(160 208)
(320 997)
32 463
(192 671)
(320 997)
92 143
89 350
92 494
89 350
(351)
60
11 961 662
13 689 055
22 124 295
8 435 240
34 085 957
22 124 295
Basis of preparation
The annual financial statements are prepared on the historical cost basis, except for financial instruments which are
carried at fair value. The principal accounting policies, which have been consistently applied in all material respects,
comply in all material respects with International Financial Reporting Standards (IFRS) adopted by the International
Accounting Standard Board (IASB) and interpretations issued by the International Financial Reporting Interpretations
Committee (IFRIC) of the IASB.
2.
The following table contains effective dates of new IFRSs and recently revised standards which have not been early
adopted by the Board and that might affect future financial periods:
New/Revised International Financial Reporting Standards and interpretations
IFRS 7
Effective Date
Financial Instruments: Disclosures - Amendments resulting from May 2012 1 January 2013
Annual Improvements to IFRSs
IFRS 7
IFRS 9
IFRS 9
1 January 2015
IFRS 10
1 January 2013
IFRS 11
Joint Arrangements
1 January 2013
IFRS 12
1 January 2013
IFRS 13
1 January 2013
International Financial Reporting Standards for Small and Medium-sized 1 January 2013
Entities
IAS 1
IAS 12
IAS 19
Employee Benefits - Amended Standard resulting from the Post-Employment 1 January 2013
1 January 2013
IAS 27
IAS 28
IAS 32
1 January 2013
The Board members anticipate that the adoption of these statements and interpretations will have no material impact
on the financial statements in future periods.
61
3.1 Revenue
Revenue comprises levies, licence and registration fees collected in terms of the Electricity Act No 2 of 2000 (repealed
by Electricity Act No 4 of 2007) to defray costs necessarily incurred by the Control Board and are recognised on an
accrual basis.
3.2
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are
stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation,
less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are
performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be
determined using fair values at the end of each reporting period.
Any revaluation increase arising on the revaluation of such land and buildings is recognised in other comprehensive
income and accumulated in equity, except to the extent that it reverses a revaluation decrease for the same asset
previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the
decrease previously expensed. A decrease in the carrying amount arising on the revaluation of such land and buildings
is recognised in profit or loss to the extent that it exceeds the balance, if any, held in the properties revaluation reserve
relating to a previous revaluation of that asset.
62
Depreciation on revalued buildings is recognised in profit or loss. On the subsequent sale or retirement of a revalued
property, the attributable revaluation surplus remaining in the properties revaluation reserve is transferred directly to
retained earnings.
Fixtures and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties
under construction) less their residual values over their useful lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect
of any changes in estimate accounted for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.
However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets
are depreciated over the shorter of the lease term and their useful lives.
Depreciation is calculated on a straight-line basis to write off assets to their estimated residual values over their
anticipated useful lives as follows:
- Buildings
- Computer equipment
- Motor vehicles
3.3
Retirement benefits
Contributions to retirement funds are charged against income in the year in which they become payable.
3.4 Provisions
Provisions for liabilities are recognised when the Board has a present legal or constructive obligation as a result of past
events, for which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be
made of the amount of the obligation.
3.5
Impairment of assets
At each reporting date, the Board reviews the carrying amounts of its assets to determine whether there is any
indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss, if any. If the recoverable amount of an
asset is estimated to be less than its carrying amount, its carrying amount is reduced to its recoverable amount and
the impairment losses are recognised as an expense immediately.
If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate
of its recoverable amount but limited to the carrying amount that would have been determined had no impairment
loss been recognised in prior years. A reversal of an impairment loss is recognised in the statement of comprehensive
income.
3.6
Cash and cash equivalents are measured at fair value and comprise cash on hand, deposits held on call with banks and
investments in money market instruments, net of bank overdrafts and call loans. In the statement of financial position,
bank overdrafts are included in current liabilities. Interest-bearing bank overdrafts and other short-term borrowings are
recorded at the proceeds received, net of direct issue costs.
For the purpose of the statement of cash flows, the Board considers all bank balances and cash with a maturity of less
than one year and bank overdrafts to be cash and cash equivalents.
3.7
Financial instruments
Initial measurement
Financial assets and financial liabilities are recognised on the statement of financial position when the Board has
become a party to the contractual provisions of the instrument. Financial instruments carried on the statement of
financial position include bank and cash balances, trade and other receivables and trade and other payables.
63
3.7
Subsequent measurement
Fair values and the recognition methods of the different financial instruments are disclosed in the notes to the annual
financial statements. Fair value represents an approximation of the year end value, which may differ from the value
that will be finally realised.
De-recognition
Financial instruments are offset when the Board has a legally enforceable right to offset and intends to settle either on
a net basis or to realise the asset and settle the liability simultaneously.
3.8
Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost
using effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in
the statement of comprehensive income when there is objective evidence that the asset is impaired. The allowance
64
recognised is measured as the difference between the assets carrying amount and the present value of estimated
future cash flows discounted at the effective interest rate computed at initial recognition.
3.9
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the
effective interest rate method.
3.10 Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the rights and rewards
of ownership to the lessee. All other leases are classified as operating leases and rentals are charged against trading
profit as they become due.
Assets held under finance lease are recognised as assets of the Board at fair value at the date of acquisition. The
corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.
Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets
acquired, are charged to the statement of comprehensive income over the term of the relevant lease so as to produce
a constant periodic rate of interest on the remaining balance of the obligations for each period.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant
lease.
There were no material judgements made by management that could have a significant effect on the amounts
recognised in the financial statements.
There are no key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date that could have a significant risk of causing material adjustment to the carrying amounts of the assets and
liabilities within the next financial year.
The Board undertakes a project on behalf of the Ministry of Mines and Energy (MME). The funds received are
accounted for as monies held in trust and all expenditure incurred on this project are accounted for separately from the
Boards transactions.
2013
4. Revenue
N$
N$
- Levies income
- Licence fees
2012
38 226 913
17 414 661
617 500
561 500
38 844 413
17 976 161
65
5.
66
2013
2012
N$
N$
Interest received
Insurance proceeds
Government grant
924 248
324 237
32 463
19 200 000
(35 350)
(16 874)
(29 917)
Expenditure:
Auditors remuneration:
113 611
105 415
10 880
11 348
450 093
- prior year
Depreciation
482 808
110 909
97 119
- motor vehicles
190 341
190 341
102 444
100 993
79 114
61 640
16 078 282
14 057 874
- computer equipment
Staff costs
Operating leases
- office equipment
6.
- service members
- other services
213 912
215 793
305 426
279 148
6 705
305 426
285 853
7. Taxation
The Board is exempt from income tax in terms of section 16(1) (e) (i) of the Namibian Income Tax Act.
8.
Land &
Motor
Computer
Furniture &
buildings
Vehicles
equipment
equipment
Total
N$ N$ N$ N$
N$
2013
Cost
At 01 April 2012
3 727 940
761 362
875 133
1 271 377
Disposals
Revaluation
423 055
166 876
589 931
4 137 025
4 137 025
Additions
At 31 March 2013
128 645
64 026
192 671
7 864 965
761 362
580 723
1 168 527
10 375 577
Accumulated depreciation
At 01 April 2012
Disposals
Depreciation
At 31 March 2013
2012
736 337
6 635 812
458 859
735 623
995 558
2 926 377
418 662
141 352
560 014
110 909
190 340
102 444
79 115
482 808
847 246
649 199
419 405
933 321
2 849 171
2 991 603
302 502
139 510
275 819
3 709 435
7 017 719
112 163
161 318
235 206
7 526 406
Cost
At 01 April 2011
3 727 940
761 362
770 487
1 055 026
6 314 815
Disposals
- - - - -
Additions
104 646
216 351
320 997
At 31 March 2012
3 727 940
761 362
875 133
1 271 377
6 635 812
Accumulated depreciation
At 01 April 2011
Disposals
Depreciation
At 31 March 2012
639 218
268 519
634 630
933 918
2 476 285
- - - - 97 119
190 340
100 993
61 640
450 092
736 337
458 859
735 623
995 558
2 926 377
3 088 722
492 843
135 857
121 108
3 838 530
2 991 603
302 502
139 510
275 819
3 709 435
67
9.
2013
2012
N$
N$
Trade receivables
4 025 407
1 617 477
Sundry debtors
38 001
84 154
12 333
32 432
(54 000)
4 021 741
1 734 063
68
54 000
54 000
(282 948)
54 000
282 948
54 000
The Boards main customer is Nampower, for which the credit terms are 30
days and no interest is charged on the trade receivable balance at year end.
The Board, therefore, believes that the trade receivables are not impaired and
the above provision for doubtful debt sufficiently covers the risk of default.
At the reporting date, the Board had finance lease commitments under noncancellable finance lease for its office equipment, which fall due as follows;
35 879
23 649
12 581
35 879
36 230
2013
N$
2012
N$
Trade creditors
Accruals
530 802
538 630
9 170 834
4 392 819
9 701 636
4 931 449
Funds received
2 303 931
92 821
2 214 581
95 847
Disbursements
(327)
(6 497)
2 396 425
2 303 931
MME Projects consist of various projects that are administered by the Board on behalf of the Ministry of Mines and
Energy. These funds form part of the bank and cash balance and are kept in a separate bank account.
69
2013
N$
2012
N$
The total value of contributions to the fund during the year amounted to:
Employee contributions
Employer contributions
409 329
396 650
836 648
805 259
1 245 977
1 201 909
70
Financial assets
Trade receivables
4 021 741
1 734 063
34 085 957
22 124 295
38 107 698
23 858 358
Financial liabilities
Trade payables
9 737 515
4 967 679
Trust funds
2 396 425
2 303 931
12 133 940
7 271 610
As part of the process of managing the Boards interest rate risk, interest rate characteristics of new borrowings and
the refinancing of existing borrowings are positioned according to expected movements in interest rates. The Board
currently has no exposure to interest rate risk as it does not have any interest bearing borrowings.
The Board only deposits cash surpluses with major banks and investment houses of high quality credit standing.
The granting of credit is made on application and is approved by management. At year-end the Board did not consider
there to be any significant concentration of credit risk which has not been adequately provided for.
The Board has minimised its liquidity risk by ensuring adequate facilities and reserve borrowing capacity.
The table below summaries the Boards exposure to liquidity and interest rate risk:
2013
Average
1-3
3 months-
1-5
effective
months
1 year
years
Total
Interest rate
N$
N$
N$
N$
Financial Assets
0%
4 021 741
4 021 741
3.29%
34 085 957
34 085 957
38 107 698
38 107 698
9 737 515
Financial Liabilities
0%
9 737 515
Trust funds
0%
2 396 425
2 396 425
12 133 940
12 133 940
71
Average
1-3
3 months-
1-5
effective
months
1 year
years
Interest rate
N$ N$ N$
N$
Financial Assets
0%
1 734 063
1 734 063
2.12%
22 124 295
22 124 295
23 858 358
23 858 358
Financial Liabilities
0%
4 931 449
4 931 449
Trust funds
0%
2 303 931
2 303 931
7 235 380
7 235 380
72
Total
Fair value
The directors are of the opinion that the book value of financial instruments approximates their fair value, as the items
are of a short-term nature.
2013
Financial Assets
1-3
3 months -
1-5
months
1 year
years
N$
N$
Total
N$
N$
4 021 741
4 021 741
34 085 957
34 085 957
38 107 698
38 107 698
Financial Liabilities
9 737 515
Trust funds
2 396 425
2 396 425
12 133 940
12 133 940
9 737 515
Financial Assets
1 734 063
1 734 063
22 124 295
22 124 295
23 858 358
23 858 358
Financial Liabilities
4 931 449
4 931 449
Trust funds
2 303 931
2 303 931
7 235 380
7 235 380
The Board manages its capital to ensure that it will be able to continue as a going concern while maximising the return
73
to stakeholders by ensuring that economic value is added throughout. The capital structure consists of accumulated
funds and cash and cash equivalents.
The Boards activities expose it primarily to the financial risks of changes in interest rates. Refer note 14.2 for detail on
how the Board manages interest rate risk. There has been no change to the Boards exposure to market risks or the
manner in which it manages and measures risk.
15. Commitments
14 332
36 796
42 997
124 720
57 329
161 516
2013
2012
N$
N$
The Board regards RERA, Government and other parastatals as related parties. The following were the transactions
entered into during the year:
(407 655)
(374 836)
19 200 000
(407 655)
18 825 164
Short-term benefits
Post-employment
74
4 849 913
4 136 534
444 364
389 158
5 294 277
4 525 692
Adjusted for:
9 066 956
13 083 980
29 917
Depreciation
482 808
Insurance proceeds
(32 463)
Interest received
(924 248)
(324 237)
8 622 970
13 209 835
450 092
2 482 509
(386 630)
(2 287 678)
(108 041)
4 770 187
494 671
11 105 479
13 596 465
2013
2012
N$ N$
INCOME
Levies received
38 226 913
17 414 661
Licence fees
617 500
561 500
Interest received
924 248
324 237
Other income
32 463
19 205 797
TOTAL INCOME
39 801 124
37 506 195
Advertising
371 018
475 797
EXPENDITURE
113 611
105 415
- prior year
10 880
11 348
54 000
Bank charges
34 063
34 645
Computer expenses
116 310
47 822
149 783
92 381
451 003
130 339
Depreciation
482 808
450 092
Members fees
305 426
285 853
Donations
119 932
148 532
Entertainment
243 040
176 328
35 350
16 874
122 938
121 065
1 065 916
785 554
1 728
2 193
173 395
148 382
29 917
Maintenance
53 184
125 350
100 382
90 225
57 528
38 655
Office expenses
Penalties
Postage and couriers
Printing and stationary
Project costs
Recruitment and staff training
Reference and resource material
Rent equipment
Salaries and other staff costs
Security services
4 424
9 090
383 865
238 710
5 732 481
2 162 942
613 304
892 863
16 055
213 912
215 793
16 078 282
14 057 874
110 629
100 441
75
Board members
531 301
2 533 431
84 918
82 046
270 023
210 349
150 155
100 525
30 734 168
24 422 215
9 066 956
13 083 980
4 137 025
13 203 981
13 083 980
TOTAL EXPENDITURE
76
470 318
2 513 590