Wednesday, 15 February 2012 14:18

Billion-dollar equity partner can revive Namibia’s gas plans

Namibia’s Kudu Gas Power Plant urgently needs an equity partner to overcome an electricity deficit which is set to widen to 300MW in 2015. The plant can be running by 2016 if Nampower succeeds in farming out 49% of the US$1,1-billion project.
Namibia’s Kudu Gas Power Plant can be operational in 2016 if the national power utility, Nampower, succeeds in roping in an equity partner to partially finance the US$1,1-billion project.
The deal to start up the 800MW power plant stalled over the years, leaving both Nampower and the government frustrated while the country’s energy requirements shortfall grows, as it is already importing 60% of its electricity.

Nampower’s managing director, Paulinus Shilamba, said the plant will start pumping power from the Kudu gas fields by 2016. However, this is a huge task for a utility battling to meet the rising demand in stagnant local generation.

Namibia faces an 80MW electricity deficit this year and it will widen to 300MW in 2015 if there is no new investment in infrastructure. The coming end of a 150MW supply arrangement with Zimbabwe’s ZESA is worsening the country’s situation and even though Nampower could extend the deal with sixth months, it would only make the power supply situation more precarious next year.

The Kudu gas project requires Nampower, which is heavily subsidised by the state, to meet its own financial obligations in constructing the power plant.

“This is a huge project and we have no capacity to finance it alone,” said Shilamba. “Nampower will own 51% of the power station, with the balance to be farmed out to the private sector. The power utility issued tenders at the beginning of this year, leading to the final investment decision by mid-2012. The implementation of the project is planned for the end of 2012 and commercial operation will start in 2016.”

Namibia’s president, Hifikepunye Pohamba, has previously stated his disappointment in the little progress made on Kudu, but Nampower has indicated that if developments at Kudu are stalled again, it could build a 450MW coal-fired plant in the Erongo region by 2016.

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