7 July 2008 – Namibia offers ‘substantial and lucrative investment opportunities’ to both international and local players, says research group, Frost & Sullivan.

Namibia_landscapeAccording to a press release, "The donor community and various financial institutions are set to enter the market soon, as there is room for investment in generation, transmission and distribution. These efforts will improve the capacity and efficiency of the power sector in meeting current and future demand."

New research by the group reveals that the Namibian markets may be worth US$2 billion by 2014.

"The Namibian electricity industry will experience growth over the next few years," says research analyst Moses Duma. "Power sector reforms have attracted sizeable investments from the Namibian Government, even as support from various international financial institutions for the country’s electricity industry is imminent."

Nampower’s rural electrification plan aims to ensure countrywide access to electricity and while the generation market is open to independent producers, all power generated must be sold to Nampower through power purchase agreements.

Nampower is increasing transmission capacity and has plans for boosting generation capacity. However, lack of funding is hampering growth.

"NamPower has decided to increase its hydro generating capacity as this is the cheaper option," remarks Duma. "There are also prospects of wind, solar and gas power generation."

However, Nampower’s reliance on hydropower does mean it is sensitive to droughts and peak consumption periods as hydropower is affected by seasonal factors.

To counter this, Nampower is exploring ways to store water along with Kunene river during the rainy season, in order to ensure a year round supply of water, even during time of drought. Negotiations are ongoing.