SORED: An agenda at local authorities’ expense?

While the establishment of Regional Electricity Distributors (REDs) is a Cabinet policy decision, this does not automatically mean municipalities must surrender their electricity distribution assets without following due legal processes, securing properly constituted council resolutions and considering the interests of their residents.

Article 102(3) of the Namibian Constitution recognises municipal councils as the principal governing bodies of local authorities, while section 30(1)(f) of the Local Authorities Act of 1992 empowers local authorities to supply electricity, subject to the provisions of the Electricity Act. There are growing concerns that regional governors and chairpersons of regional councils affiliated with SWAPO are being tasked with securing the participation of southern local authorities in SORED. Equally troubling are reports of political pressure being exerted on municipalities to join the proposed distributor without adequate public consultation.

Passive recipients - Residents should not be reduced to passive recipients of decisions made elsewhere.

They are electricity consumers and ratepayers whose interests must remain central to any reform of the electricity distribution sector. Those who will ultimately bear the consequences of possible tariff increases and changes to service delivery arrangements deserve to be consulted, not presented with decisions made through political directives. At the heart of this controversy is the potential loss of municipal revenue and control over valuable electricity assets. In Mariental, electricity accounts for approximately 37.2% of the municipality's total income. This is not expendable revenue. It helps sustain municipal operations, including salaries, road maintenance, street lighting, sanitation and other essential services.

During engagements with SORED's board of directors, no sufficiently clear assurances were provided on whether municipalities joining the distributor would receive financial compensation or subsidies to offset the revenue shortfall resulting from the transfer of their electricity operations. Neither were adequate guarantees provided regarding the settlement of outstanding municipal electricity debts. This raises a fundamental question: how can municipalities be expected to relinquish one of their most significant revenue-generating functions without clear assurances about how they will meet their future financial obligations and sustain essential services?

Control board - The Electricity Control Board's (ECB) acknowledgement of the need for financial impact assessments, alongside consideration of increased government subsidies, further underscores the seriousness of these concerns.

If such interventions are necessary, it is reasonable to question whether the proposed arrangement has been adequately assessed and whether its financial implications are fully understood. The position articulated by the Minister of Industries, Mines and Energy, Modestus Amutse, that electricity infrastructure constitutes a national security asset requiring government control to regulate tariffs and safeguard national interests, also raises questions about the consistency of government's approach to electricity reform.

While a regional distributor is not necessarily privately owned, the government must explain how SORED's proposed governance and operational arrangements will guarantee public accountability, protect municipal interests and ensure long-term financial sustainability. It would be contradictory for government to champion an electricity distribution model that potentially weakens the financial capacity of local authorities while simultaneously expecting those same institutions to maintain and improve essential services. Municipalities cannot be stripped of significant revenue-generating functions and then be expected to deliver the same services with diminished financial resources.

Reforms - Electricity reform should strengthen local governance and improve service delivery, not undermine the very institutions closest to the communities they serve.

Ultimately, municipalities must not be pressured into transferring valuable infrastructure and revenue-generating functions without meaningful public consultation, transparent financial impact assessments and legally enforceable guarantees protecting their interests. The debate should not be reduced to whether municipalities support or oppose SORED. It should be about whether the proposed model is financially viable, legally sound and beneficial to the communities expected to sustain it. Municipal revenue is not merely an accounting figure. It is the financial backbone of local service delivery and, by extension, the livelihoods and dignity of residents. Any electricity reform that jeopardises this foundation without providing credible alternatives deserves scrutiny.

*Hermanus Isaaks is an LPM-deployed councillor and chairperson of the Management Committee of the Mariental Municipality.