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NamPower Secures Funding for Regional Electricity Grid Project

Dec 11, 2008 - Chamwe Kaira - Bloomberg.com

Namibia Power Corp., the southern African country’s power utility, secured 1.1 billion Namibian dollars ($109 million) from three European development banks to link its power grid to other countries in the region.

The funding will come from the European Investment Bank, the French Development Bank and the German Development Bank, said Paulinus Shilamba, managing director of the state-owned power company. The project, called the Caprivi Link Interconnector, will connect Namibia’s electricity grid with those of Zambia, Zimbabwe, Mozambique, South Africa and the Democratic Republic of Congo.

“The Development Bank of Namibia also granted a loan of 60 million Namibian dollars in this regard,” Shilamba told reporters today during an update on NamPower’s projects. The 350 kilovolt line is expected to be operational by the end of next year, he said.

NamPower is investing 9 billion Namibian dollars over five years to expand its electricity-generation capacity. Namibia, which imports half the electricity it uses, needs to add at least 300 megawatts of generation capacity to meet domestic demand.

Shilamba said the construction of a fourth unit at the Ruacana Hydro Dam on the Angolan border, which will increase capacity to 320 megawatts from 80 megawatts, will start in mid- 2009.

NamPower is also close to completing an agreement with South Africa’s Clarkson Power for the joint development of hydropower stations along the Orange River, on the border with South Africa, he said.

Kudu Gas Project

South African utility Eskom Holdings Ltd. has also approached it about partnering NamPower in the development of the Kudu Gas Project, while large energy users in the country “have indicated their willingness to participate in the project as power off-takers,” he said.

Development of the Kudu field, which holds about 3 trillion cubic feet of gas, has been delayed by negotiations with operator Tullow Oil Plc about the price of gas and how to handle currency fluctuations, Shilamba said.

Positive developments in negotiations have recently been made, and “we now strongly believe that a breakthrough will be made in due course for the development of Kudu,” he said.

To contact the reporter on this story: Chamwe Kaira in Windhoek via Johannesburg at abolleurs@bloomberg.net.