SWAKOPMUND – The Sunam joint venture will need at least N$ 2.1 billion for the construction of the new desalination plant in Erongo.
The government will hold a 30% stake through NamWater, while private partner Swakop Uranium will own the remaining 70%.
The figure is based on a 2021 feasibility study, although the final cost will be determined through the procurement process underway.
NamWater’s chairperson of the desalination steering committee Onni-Ndangi Iithete revealed the funding structure during a presentation to the Erongo Regional Council in Swakopmund earlier this week.
The engagement forms part of NamWater’s request for land north of the existing Orano desalination plant along the C34 road for the construction of the second desalination plant.
Iithete said the project will be financed through a 60/40 model.
A total of 60% of the capital cost will be raised as debt at the joint venture level, while 40% will be financed through equity contributions by the two shareholders.
“Of the 40% equity portion, Swakop Uranium will contribute 70% in line with its shareholding, while NamWater will contribute 30%,” he told the council.
This means NamWater’s equity contribution will amount to about N$258 million, while Swakop Uranium will inject approximately N$600 million.
The remaining N$1.2 billion will be raised as debt.
He said Cabinet already approved N$200 million towards NamWater’s equity requirement.
NamWater will only cover the remaining balance of about N$58 million from its own resources, largely through pre-development costs already incurred.
Iithete said the private partner will assume most of the financing risk, particularly in raising the debt portion of the project.
Minority safeguards
NamWater will hold a minority stake, Iithete said the joint venture agreement includes protection mechanisms to safeguard the government’s interests.
“There are about 15 reserved matters that require consultation with NamWater before key decisions can be taken, despite Swakop Uranium’s majority shareholding,” he said.
He said these provisions are standard in joint ventures involving state entities and are designed to ensure oversight and accountability.
Mining demand driving expansion
Iithete also indicated that the demand for water is largely driven by growing demand from the mining sector in the Erongo region.
“We are in an economic situation where uranium mining is booming, and it is driving demand,” he said.
Projected water demand for the central coastal areas is expected to reach 36.2 million cubic metres per annum by 2050.
Project timeline
Iithete said a call for expressions of interest was issued in December, followed by requests for proposals to shortlisted bidders for the desalination plant.
“The tenders are expected to close at the end of March, with construction scheduled to start from June 2026 to June 2028. We expect the desalination plant to commence operation in mid-2028,” he told the council.
He added that NamWater already completed the required environmental and regulatory processes and is now seeking guidance from the Erongo Regional Council regarding the land they want to lease from the council.
He said NamWater has no profit motive regarding the land arrangement.
“Whatever lease value is determined by the council will be taken to our private sector partner. The new plant will add 20 million cubic metres per annum to the system. Iithete also explained that both the existing Orano plant and the new facility are expected to operate side by side as demand in the region continues to grow.