Namibia, Angola to build $7 billion power plant

Namibia and Angola plan to build a joint $7 billion hydro power plant on a river that runs along their common border to produce 400 megawatts of electricity, a senior government official said yesterday.

Daniel Zaire, the deputy director for electricity at the Namibian ministry of mines and energy, told Reuters the construction of the project on the Kunene river would start by next March, and would be carried out by Brazilian companies, Reuters says.

The plant would be built on a 50/50 basis by the two countries despite the financial crisis, Zaire said.

“The construction will take between five to eight years, and may kick off in March next year once all feasibility are completed,” Zaire said on the sidelines of an Africa power conference in Johannesburg.

“The project will be financed by the two governments, development agencies and some banks in South Africa,” he said.

He said reliance on imports from South Africa’s state utility Eskom had put Namibia in a vulnerable position, and it wanted to widen its power supply alternatives.

Namibia, a producer of gold, diamonds, uranium and copper, faces a shortfall of power and imports electricity from neighbouring South Africa, itself beset by power shortages.

Across the border, Angola, which rivals Nigeria as Africa‘s biggest oil producer and depends on oil exports for 90 percent of its income, suffers frequent power blackouts.

Namibian power officials said the country was expanding its power supply, but development of its big Kudu gas-to-power project, has again been delayed, partly due to disagreement over commercial terms, as well as technical difficulties in piping the gas from the ocean.

The original plan was for Kudu to supply 800 MW of power under a joint development agreement with Eskom.

Bertholdt Mbuere, chief operating officer at Namibia‘s state utility NamPower, said he expects a decision to be reached on Kudu by August. He said the parties involved would decide whether to have Eskom as part of the project, or whether Kudu would generate half its capacity to supply Namibia only.

Mbuere said power expansion costs had risen, but he was confident that with government support, international funding and its own healthy balance sheet, NamPower would fund the projects.

“The crisis (which had seen power demand fall) is our window of opportunity to expand our generation capacity, bring up those projects which were in the pipeline, expedite them and bring them on-stream as soon as possible,” he told Reuters.

The country has rolled out a 13.9 billion Namibian dollar investment programme until 2013 to increase capacity, and expand its transmission network to cope with rising demand from mine expansions in the country.