WINDHOEK – Prime Minister, Dr Hage Geingob, has advised Nampower to consider approaching institutions within the country, such as the Government Institutions Pension Fund (GIPF), for financing required to keep the lights on in the country.
During a presentation to Geingob yesterday Nampower Managing Director, Paulinus Shilamba said that between 2014 and 2020 the national power utility will require close to N$19 billion for capital projects and maintenance and replacement of aging infrastructure, while about half of that amount will be funded by Nampower’s own cash reserves and revenue from operations. About N$5.5 billion will be financed through loans. Government has already allocated N$1.6 billion to Nampower within the current budget cycle, and has pledged N$2.3 billion in subsidies to alleviate pressure on consumers.
Shilamba explained that the current challenges in keeping the lights on include an over reliance on imports – between 60 percent to 80 percent of the country’s annual electricity demand is imported, regional transmission congestion, ageing infrastructure such as the Van Eck Power Station that is more than 30 years old, interruptible supply from South Africa’s Eskom, accommodation of Independent Power Producers (IPPs) and high economic growth. He added that during 2014 the utility will require N$2 billion to ensure the reliable supply of power and by 2018 this will have ballooned to N$7.5 billion. Moreover, according to Shilamba these challenges will be exacerbated by the termination of up to 750 MW of regional Power Purchase Agreements (PPAs) within the next 15 months. For instance, the supply of 150 MW provided by the Zimbabwe Electricity Supply Authority (Zesa) will come to an end in October this year, while Eskom will cease to provide 200 MW by April next year.
However, Shilamba reiterated that the country’s power supply until 2015 is ‘manageable’ but stressed that between 2016 and 2017 “serious power supply deficits will be experienced.” To combat this possible shortage of electricity Nampower intends constructing a 250 MW power station at the coast. “The latest analysis found a 250 MW long-term plant at Walvis Bay to be a more viable and cost-effective option than making use of emergency diesel generators,” noted Shilamba. Tenders have already been released to the market for this project that will also act as a stand-by power station should the Kudu Gas Power Station be down for maintenance. “This project must be fast tracked to be operational by mid 2016,” he said. Shilamba also explained to the PM that as of 2018 and beyond, once the Kudu Power Station is commercially ready, Namibia will be able to meet local demand and will become a net exporter of electricity to the region.
By Edgar Brandt