NamPower has denied recent reports that it has received a communication from Finance and Public Enterprises Minister, Iipumbu Shiimi, regarding a Cabinet Directive to halt the planned power suspensions of Local Authorities pending further consultations.
Nampower in a statement issued on Wednesday stated that after careful consideration, the Board of Directors unanimously decided to exercise its fiduciary responsibilities to the company and to protect the company’s and stakeholders’ interests.
The Board and management decided to go ahead with the disconnection plan because it is in the best interests of the company’s financial sustainability and the country’s electricity supply.
‘’Disconnecting defaulting customers was the last resort after exhausting all existing interventions to collect long outstanding debts, as non-payment of debts detrimentally affects the company’s duty to supply electricity to the entire country on a sustainable basis. NamPower recognizes that the unintended consequence of the sustained failure to collect dues from clients will result in all future borrowings for generation and transmission infrastructure being guaranteed by the sovereign, due to our inability to collect contractually,’’ it said.
Meanwhile, Shiimi on Tuesday in Parliament said the power utility has not responded to a request by the Ministry to provide information on debt settlement by defaulters.
The Ministry then briefed Cabinet on the deteriorating debt situation of Local Authorities, as well as NamPower’s intention to suspend power to defaulting Local Authorities.
‘Cabinet directed NamPower to halt the planned power suspensions pending further consultations with the Ministries of Finance and Public Enterprises, Urban and Rural Development, and Local Authorities,’ he said.
He also stated that the Ministry has requested a meeting with the NamPower Board and Management to obtain an explanation for their failure to provide Cabinet with the information it requested and to comply with the Cabinet Directive, as well as to ensure future compliance.
”We want to encourage local governments that are deeply in debt to contact NamPower and work out payment plans. This is critical for NamPower’s operations to remain sustainable,” he said.
Source: NAMPA