3 October 2012 – According to the Namibian, NamPower has extended the US$40 million power supply deal with the Zimbabwean Electricity Supply Authority (Zesa) for another year, because Zimbabwe has partly failed to deliver on the deal. The extension is to ensure that Zimbabwe delivers on a shortfall of a year’s electricity that has not reached Namibia, while some provisions have been overtaken by events and pressure from the Zimbabwean government which labelled the agreement prejudicial to Zimbabwe.

The two companies have a deal in which the Namibian power utility made available US$40 million towards the refurbishment of the Hwange station and in return Zesa was supposed to deliver 150 MW of power daily to NamPower for five years.

According to the CEO of NamPower, Paulinus Shilamba, Zimbabwe had a shortage of foreign currency due to sanctions and thus could not rehabilitate the Hwange power station, while Namibia experienced a power crisis. “The money was deposited in a bank account in Botswana and jointly managed by NamPower and Zesa. The account was also audited and so far we can account for each penny that has been spent on the rehabilitation of the Hwange station. There is still between US$15 million and US$20 million that we have to pay over, but that will only be done once Namibia has received all the electricity that we have agreed upon,” Shilamba told The Namibian.

Zesa is sending the electricity via Botswana to South Africa before it reaches Namibia. Shilamba said in the past the agreed 150 MW was not received every day due to transmission breakdowns.“Nobody could be blamed for that. This has resulted in Zesa still owing us power for another year and therefore the contract was extended until November 2014 after which we again have to renegotiate for a new agreement.”

Shilamba said some of the provisions in the agreement were outdated. The amendment means that NamPower must now pay more for the power received from Zesa. Earlier, Zimbabwean minister of energy and power development Elton Mangoma wanted Zesa to settle the outstanding debt with NamPower and terminate the power supply agreement. According to him Zesa is selling power below cost to Namibia.

“It’s true that the cost for power supply in the region has increased dramatically as well as that of diesel and coal. Therefore we have to amend some of the provisions to reflect the reality on the ground. Now both NamPower and Zesa are satisfied with the agreement. This is a win-win situation for both companies,” Shilamba said.

Namibia is generating 45% of its consumption locally, while 55% is imported from Eskom in South Africa, Zesa in Zimbabwe and Zesco in Zambia.

NamPower receives 50 MW daily from Zesco but according to Shilamba it is negotiating with the Zambian utility to make more electricity available to Namibia. “We requested an additional 100 MW daily and with new power station in Zambia it would be possible for them to sell it to us.”