Business Reporter
THE Ministry of Mines and Energy has entered into a Service Level Agreement with the Northern Regional Electricity Distributor (NORED) through the Solar Revolving Fund (SRF). Speaking at the Ongwediva trade fair where the agreement was signed, Bryan Eiseb, Acting Executive Director of the Mines Ministry, explained that through SRF, the ministry will continue to roll out the grid-connection financing mechanism to all the REDs to accelerate the expansion of grid electrification throughout the country.
“This Agreement covers the grid-connection financing mechanism intended for off-grid communities living in the NORED licensing areas. The Government of the Republic of Namibia, through the Ministry of Mines and Energy, has identified rural electrification as a program of critical importance to improve the livelihoods of rural communities and promote socio-economic development in the country,” Eiseb said.
He explained that rural household grid connections have been a challenge due to dispersed rural settlements, which contribute to high costs of connection per household. Even though grid infrastructure is available in many rural communities, the connection still requires funds to be made available to procure the required infrastructure.
These connection costs vary depending on the distance between the grid lines and the household to be electrified. These costs may include components such as transformers, cables, poles, labour, and other associated costs.
The Ministry through SRF provides financing to communities living in off-grid areas to have access to energy services. According to the Ministry’s Strategic Plan, SRF targets to finance 400 off-grid households during this financial year. To achieve this objective, MME established strategic alliances with REDs that allow consumers living in known areas to make use of the available financing program and subsidy to enable them to have access to electricity by connecting to the grid.
“The SRF offers subsidized loans to Namibian citizens at an interest rate of five percent (5%) per annum over a five (5) year period. Moreover, grid-connections are financed at a maximum loan amount of N$150,000.00. The revolving element of loans financed through the SRF is to ensure more people benefit from the SRF,” Eiseb explained.
According to the Namibia Household National Data of 2016, there are 235,884 rural households, of which only 35,855 are connected to the grid, while 18,324 rural households have access to solar energy, giving a rural electrification rate estimation of 20%.
Furthermore, the statistics show that over 80% of rural households use wood for cooking, and over 50% of rural households use battery lamps, flashlights, or cellphones for lighting, with 10% using candles.
“Permit me to draw your attention to the Harambee Prosperity Plan Two, which, amongst other aims, aims to electrify about 6,000 rural and 13,000 peri-urban households. Therefore, this financing mechanism aims to contribute toward achieving the energy goal of secure and cost-effective energy supply. Hence, the Ministry of Mines and Energy,” Eiseb said.
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