Angola Developing Hydropower with Namibia and Norsk Hydro

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Researched by Industrial Info Resources (Sugar Land, Texas)--Angola's government and Norway's Norsk Hydro ASA (OTC:NHYDY) (Oslo) have signed a memorandum of understanding to study the feasibility of developing an integrated hydropower and aluminum production project. According to Manuela Vieira Lopes, Angola's Minister of Energy, the country's recent economic growth has given rise to an increased demand for power, and the memorandum is expected to boost Angola's power and aluminum production sectors. The commitment was signed by Lopes and Arvid Moss, Norsk Hydro's Head of Strategy and Business Development.

The two parties have been in talks for several years and this early fact-finding memorandum is a result of those talks. If realized, the proposed power project would have a power generation capacity of 750 megawatts (MW) to 1,000 MW, along with associated power transmission lines. The parties are now involved in the initial fact-finding stage of the investigation. The commitment represents a long-term opportunity for Hydro.

In another development, Angola and Namibia have announced plans to build a $7 billion hydropower project on the Kunene River, which forms a natural border between the countries. The project would generate 400 MW of power annually. Daniel Zaire, Deputy Director for Electricity at Namibia's Ministry of Mines and Energy, said construction is likely to start in March 2010 after feasibility studies are complete. Construction would be carried out by Brazil-based companies and would be completed in five to eight years. Angola and Namibia would finance the project on a 50:50 basis. Other than the two governments, some South African banks and development agencies would also be involved in the financial aspect of the project.

Namibia currently depends on power imports from South African utility company Eskom (Sandton) to meet its power needs. With the development of the new project, the country would reduce its dependence on Eskom and at the same time, broaden its power supply options. Angola is Africa's largest producer of oil but suffers from severe power shortages.

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