HomeIndustry SectorsFinance and PolicyNamibia faces electricity supply challenge until 2018

Namibia faces electricity supply challenge until 2018

During May 2014, managing director of Namibian national utility, NamPower, Paulinus Shilamba, said that the country will fact a shortage of as much of 750 MW within the next one to two years. This is when regional power purchase agreements end, these related to 150 MW from Zimbabwe Electricity Supply Authority (Zesa), 200 MW from Eskom and another 300 MW of off peak supply from the South African utility, and 115 MW being supplied by Aggreko out of Mozambique.

“Namibia will continue to experience power supply deficits and keeping the lights on will remain challenging until the commissioning of Kudu in 2018,” Shilamba said in a report by the Namibian. He also says that NamPower will require government support to enable the company to maintain power supply and keep electricity rates at affordable levels.

Namibia’s Electricity Control Board (ECB) approved a 13.22% bulk electricity tariff increase for NamPower with effect from 1 July 2014. “There is a huge increase in the demand for electricity. Currently, the country imports 60% of its energy and during dry seasons, it imports up to 80%,” Shilamba says.

Acting CEO of the ECB, Rojas Manyame, says that NamPower requested a bulk electricity tariff increase of 21.29% for 2014/2015 to meet its service delivery costs, but the ECB stuck to the 13% increase, as was the case in the 2013/2014 fiscal year.

NamPower justified its 21% tariff increase proposal on the fact that it is pursuing various transmission and generation projects to secure reliable power supply to Namibia in the short- and long-term. “Energy supply from Eskom is continuously being interrupted and in fact it has been disconnected two times.”

According to Shilamba, a new 250 MW plant will be commissioned at Walvis Bay by 2016 to deal with the power crisis and serious power supply deficit that are expected. “The tenders for the procurement of the strategic equity partner and project developer are currently in the market.” The project will be developed through a Special Purpose Vehicle (SPV) in which NamPower will have up to 30% equity.

He says that analysis found that the Walvis Bay plant would be a more cost effective option in comparison with the short term option mainly due to its long term benefits post Kudu. “Leasing of emergency diesels has been one of the ways to ensure security of supply for Namibia.”

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