How OPE is surviving island status
Oshakati Premier Electric (OPE) is the sole distributor of electricity to the Oshakati Town.
OPE was established in 2000 and since then, it has never looked back as its principled management team has enabled it to excel in a field some electricity distributors have failed in.
Prime Focus magazine held an exclusive interview with the CEO, Fillemon Nakashole, who shared with us some insights on how he has managed to score success after success for over 12 years at the company.
PF: Let us get under the OPE skin, who or what is OPE?
FN: Oshakati Premier Electric (Pty) Ltd (OPE), was established and operationalised in the year 2000 as an asset-based company to distribute and supply electricity in Oshakati town. It was a joint venture company between NamPower and the Oshakati Town Council until June 2007 when NamPower relinquished its shares in the company making Oshakati Town Council a sole shareholder.
PF: Mr Nakashole can you share with us what have been the major highlights of your journey as a company?
FN: The journey has not been an easy one given that the electricity infrastructure of Oshakati are as old as the town itself. So there was need to refurbish aging infrastructure. Secondly, as the biggest town in the northern part of the country where the majority of our people live, the town has many informal settlements that need(ed) electricity, so the company had to embark on major electrification projects as guided by its Electricity Distribution Master Plan, which was commissioned in 2001.
PF: You have been credited for being a well-managed electricity distributor. How did you get the sums right given that most distributors struggle to get off the ground like the Erongo Red?
FN: Shareholder commitments and support to its company is vital for its survival. Secondly, best governance practises coupled with strategic planning and implementation of company objectives are keys to its success. Customer engagement is of utmost important because they ultimately feel their ownership of the company.
PF: How would you rate your managerial skills or describe your management style, which has carried you this far?
FN: I am a good listener and a team player. I motivate others and encourage my colleagues to acquire lots of skills through mentorship and training. I make sure that people take decisions made.
PF: Most engineers are often said to lack managerial experience. What did you do to up the ante as you seem to have your arms around OPE?
FN: Yes, it is true but one must recognise their weaknesses and act accordingly and that is what happened to me. I saw the need to acquire managerial leadership skills, so I did a masters degree in Business Leadership (MBL) from the University of South Africa, which I completed in 2005. I am currently in my 3rd year doing an LLB degree. As a CEO, it is very important to understand most of the aspects of the business one runs.
PF: How many departments do you have and can you tell us their functions? In regard to OPE’s growth, which one/s would you say are the most critical and why?
FN: There are two major departments at OPE, which are Technical Services; as well as Finance and Administration. Both are critical since one deals with engineering works while the other deals with the finances of the corporation.
PF: How healthy is OPE in terms of assets and the financial status?
FN: OPE as an asset-based company has got a very strong balance sheet and has always given good returns to its shareholders since its inception.
PF: Since taking up your position as the CEO, what important strategic decisions or plans has you put in place to manage the affairs of OPE?
FN: As the CEO who started with the company, I had to make sure that I put up an organisational structure that supported the company’s goals and objectives. So I employed the best people and created the best team.
In 2001, an Electricity Distribution Master Plan was commissioned, backed by detailed financial modelling of the corporation. Implementation of that master plan started immediately after commissioning. We are currently updating our master plan to be in line with our new town master plan.
PF: Often, the relationship with the board can be frosty, how do you manage your board members?
FN: OPE has got very professional board members of whom most are independent. They understand the operations of the company as well as the industry (ESI) and that makes the relationship between the Board and management, the best.
PF: Can you tell us about your relationship with Nored and how you became an island in the distribution networks?
FN: OPE was created first before all the REDs and being a PTY Ltd company, the Companies Act governs its operations. Nored is also a PTY Ltd company and the principle of mergers and acquisitions dictates the decision for an amalgamation option. Secondly, shareholders also have to weigh options as to whether or not it makes for a business case for such a merger to take place.
PF: So with Nored presenting as a competitor, Who do you classify as your key clients in your business operations?
FN: (With) Oshakati being the ‘capital’ of the North, almost all Government ministries are represented in Oshakati. We have the best referral hospital in the North too. Other bigger customers are the Game Complex, Namibia Beverages, NamWater, Meatco, hotels, banks, magistrate and high courts, Bank of Namibia and many others.
PF: Would you confidently and boldly say that you are fulfilling your mandate and if so, could you give them some milestone to justify your stance?
FN: Yes, definitely and here are some of our milestones:
• Electrification of Uupindi North and Uupindi South
• Electrification of Evululuko Extension 10, 11 and 12
• Electrification of Kandjengedi Extension 15
• Erection of 47 high mast area lights mostly in what is called informal settlements
• Installation of traffic lights (robots) at 7 junctions to regulate the flow of vehicles
• Equipping almost all streets with street lighting
• Maintaining distribution losses at less than 7 %
• Establishing and running a 24-hours fault reporting centre
• Upgrading of aging electrical infrastructure
• Maintaining debtors day at less than 30 days and
• Setting up 24 hours prepaid vending stations
PF: You are 100% owned by the Oshakati Town Council. In line with empowerment of the previously-disadvantaged, do you have plans to share the slice of the cake and if so, what formula will you use for this status?
FN: Our mandate is to keep Oshakati’s lights on, while keeping electricity (supply) safer and reliable. We have, however, recognised the need to empower others and that is why we are giving bursaries to students studying electrical engineering. Currently, we have six students as our bursary holders. We also train artisans who aspire to become electricians.
PF: Could you walk us through how you conduct your business and how you make your money in the process?
FN: OPE is on the retail side, it buys power in bulk from NamPower and sells it to its customers. Being in a regulated industry, we can obviously sell only at the Electricity Control Board (ECB)-approved tariff only.
PF: How do you determine your tariffs and are there compliance regulatory issues you adhere to?
FN: ECB has set up an operational manual reporting (ORM) methodology that is used by utilities and municipalities to determine the revenue requirements and tariffs are approved based on that methodology. Further, ECB standard documents that utilities must comply with such as Service Standard and Supply Standards, etc., are other guiding documents.
PF: Skills shortage has been cited as a major stumbling block in realising the full potential of this country’s economy. How are you handling this at OPE to make sure service is not interrupted?
FN: At OPE, we train our employees and encourage them to work while still studying. We believe that continuous coaching and mentorship enable them to realise their full potential.
PF: Tell us about your relationship with ECB, NamPower and MME. Who does what here and do you feel supported in the process?
FN: It is very important that OPE maintains a good relationship and understanding with the regulator, ECB. NamPower is our electricity supplier and as a loyal customer to NamPower, we have an excellent relationship. MME is the policy-maker and OPE is guided by those policies.
PF: The issue of stolen cables is gathering momentum countrywide (with) Telecom being the hardest hit. Illegal connection of electricity is also on the rise when it comes to OPE. What other problems are you faced with and what plans are in place to mitigate the impact?
FN: We are not experiencing lots of cable thefts. Through meter audits, we manage meter tampering and thus our distribution losses are at less than 7%.
PF: The price of electricity is soaring and sooner or later, this important commodity will soon be out of reach for your customers and obviously beyond your control but what plans do you have to cushion your customers from the impact?
FN: It is an obvious case that electricity tarrifs will have to go up, taking into account that the country does not have enough electricity capacity at the generation side. Power stations will have to be built and that will come at a cost, which will have to be passed on to customers. Demand Side Management (DSM) is the only direction customers must take to save electricity.
PF: Would you say OPE is a cash-cow for Oshakati Town Council and how do you share or plough back to your loyal clients the super profits you make?
FN: Oshakati Town Council does not only expect monetary returns from OPE but also likes to see happy customers, electrification and reliable electricity supply that would enable investors to come to Oshakati.
PF: There has been an outcry that there are too many middlemen in regard to electricity supply. OPE being no exception; they are making life for the poor and ordinary people difficult. Is this a myth or perception and what have you done to shake it off as a company?
FN: Electricity is a catalyst for economic development and is a commodity that is needed by everyone. It, therefore, need to be effectively and efficiently managed, hence the need to commercialise it. Customer engagement is vital for the residents to buy into it and operations need to be done in a very transparent manner.
PF: What sort of challenges are OPE facing in dealing with service delivery issues and if anything, at what level would you want to operate?
FN: OPE constantly has to respond to the ever mushrooming of new settlements as these settlements would need to be provided with electricity even though sometimes it is not viable to do so. Recent flooding have also affected OPE’s planning.
PF: Speaking of, Oshakati is among the flood-prone areas, how do the flood issues affect your business operations and the bottom line?
FN: We are busy updating our Electricity Distribution Master Plan to accommodate our new town master plan, which was developed as a result of the floods.
PF: You are talking about the master plan can you tell us more about that
FN: The Oshakati Town Council is currently developing their own master plan to prevent the floods, so equally the same we are working on our own master plan to stay relevant.
PF: Besides the looming floods the looming power crisis will not spare anyone, are you prepared to stay afloat?
FN: We are encouraging our customers to save electricity at all times and are constantly in contact with NamPower in monitoring the situation.
PF: There is a master plan for the Oshakati town, what initiatives are in place for it to stay relevant?
FN: We are updating our electricity distribution master plan to be in line with that of the town.
PF: What, in your opinion, is the future of other distributors and OPE in particular?
FN: It is envisaged that there will be an Electricity Distribution Summit to map out the future for distributors and restructuring of the Electricity Supply Industry (ESI). OPE will continue to deliver the best service to the town of Oshakati meanwhile.
PF: What is the worst that could happen to OPE, which often keeps you awake?
FN: The worst that could happen is if NamPower’s transformer at the intake station blows up as that would mean that the whole of Oshakati would be without power for a couple of days.
PF: So what plans are in place to help Namibia move forward in achieving the national electricity supply goals?
FN: Namibia is progressing very well; we have our Vision 2030 set goal to achieve. Initiatives like Tipeeg, for instance, and others are aimed at developing the country to an industrial one.
PF: As CEO, what would ease the imminent energy crisis in the region and do you believe in the development of nuclear energy as an option?
FN: We need to build power stations for the country to be self-sufficient and stop relying on neighbouring countries for power supply.
PF: What can your consumers expect from you in the next five years?
FN: In line with Vision 2030, as guided by our master plan, OPE will continue with the electrification, upgrade of aging infrastructure while maintaining affordable and sustainable tariffs.
PF: What social responsibility projects are OPE involved in and in over time, do you reap the benefits?
FN: Among other things, OPE gives bursaries to engineering students, trains electricians and these people are eventually employed or they create employment. PF
Who is Fillemon Nakashole?
Where were you born and where did you grow up?
I was born and bred in Oshigambo Village in Oshikoto Region.
Can you tell us about your educational background?
I matriculated from Oshigambo High School, completed a national diploma in Electrical Engineering at Pretoria Technikon (now Tswane University of Technology), obtained a Bachelor of Technology degree in Electrical Engineering (B. Tech: Eng) at Witwatersrand Technikon (now University of Johannesburg). I have Master of Business Leadership (MBL) from University of South Africa (Unisa) and post-graduate certificate in Public Sector Governance (PSG). I am currently studying towards a Bachelor of Law (LLB).
How did you end up in the engineering profession?
I was very good at Sciences and Mathematics at school and always admired engineering work and therefore decide to give it a try.
How has it been working at OPE?
Working for OPE has been a challenge since it is a company that supplies the most needed commodity (electricity) to the community. The challenge is always to determine sustainable tariffs, which is affordable and can cater for expansion and maintenance of old infrastructures. Commercial companies like OPE do not receive any grant or subsidy from the Government and therefore, financial prudence and proper planning is very essential.
How do you deal with negativity and naysayers?
I ignore them because I don’t have energy to waste.
How competitive is Namibia globally?
Namibia is very competitive given its resources like uranium, diamonds, copper, meat, fish, etc. The country has the sea, thanks to our Walvis Bay corridor. Most important is peace and stability that we enjoy in Namibia and best governance of our country.
What key leadership lessons have you learnt in your career thus far?
As a leader, one needs to be visionary and patient. Fair treatment of employees and all stakeholders are critical to success.
What are the biggest challenges you have faced in your life and career to date?
The biggest challenge was to establish a company (OPE) from scratch and bring it to the level where it is recognised as one of the best companies in the country.
How do you achieve work-home balance?
My family comes first; I attribute all my success to their support and guidance, especially from my wife, Latenda.
What success tips can you offer to aspiring CEOs or executive managers?
One needs to understand the business that you manage holistically; you can’t manage what you do not know, otherwise, it would manage you and that is chaotic.
What makes you passionate about your job?
My team at OPE, the environment as well as our customers and community engagement.
Which accomplishments are you most proud of?
When I look at the transformed Oshakati; from the dark Oshakati to a lit-up Oshakati.
What makes you passionate about your business?
I get passionate when the business is moving according to the master plan and dreams are being realised which were impossible to others through their premature assumptions.
How has a master’s degree helped your career?
The master degree that I did was on business leadership and not pure administration, so as a business person, the degree contributed on how I can make good use of the available resources (human capital, financial, etc) at my disposal and make the best out of them.
What are your success secrets?
Secrets are secrets and however the general principle is of Ubuntu, a strong formulation that my very being derives from yours and yours from all of us. This is expressed in the Zulu proverb: Umuntu ngumuntu ngabantu (I am because you are, you are because we are).
Who are your heroes?
Dr Sam Nujoma, our President Dr Hifikepunye Pohamba, Nelson Mandela and Thabo Mbeki.
What are your basic business principles?
Business will never succeed without the support of its potential and existing customers and therefore, customer engagement is vital to the success of a business,
What basic principle should business people live by?
Ethical, honest and transparent business leaders will always emerge victorious.
What legacy would you like to leave behind?
I would love to see the electricity supply industry finally transformed in Namibia by applying the OPE model, whether modified or not, for the benefit of all Namibians (customers or utilities)
What are your future plans?
To continue contributing in shaping our energy industry in line with our country’s developmental goals and our Vision 2030 objectives and beyond.
What is your personal motto?
To make always a positive mark that will be remembered and honoured by generations to come.
What are your long-term ambitions?
To be an icon that Namibians will be proud of some day.
What book are you currently reading?
I am currently reading two books; God is my CEO and Planet Transient Care Taker
What makes you happy?
Uncomplicated, honest and friendly people.
How do you unwind?
Being among people - I am a social person. PF