We have studied the electronic properties of the ladder compound α′-NaV2O5, adopting a joint experimental and theoretical approach. The momentum-dependent loss function was measured using electron energy-loss spectroscopy in transmission. The optical conductivity derived from the loss function by a Kramers-Kronig analysis agrees well with our results from local spin density approximation (LSDA) +U band-structure calculations upon application of an antiferromagnetic alignment of the V 3dxy spins along the legs and an on-site Coulomb interaction U between 2 and 3 eV. The decomposition of the calculated optical conductivity into contributions from transitions between selected energy regions of the density of states reveals the origin of the observed anisotropy of the optical conductivity. In addition, we have investigated the plasmon excitations related to transitions between the vanadium states within an effective 16-site vanadium cluster model. Good agreement between the theoretical and experimental loss functions was obtained using the hopping parameters derived from the tight-binding fit to the band-structure and moderate Coulomb interactions between the electrons within the ab plane.