Namibia Funds Zimbabwe's Power Upgrade to Secure Supplies

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Industrial growth and increased access to electricity for all inhabitants has resulted in stronger power demand in Africa, especially in the southern African region. Power swaps, cross border/cross country transmission projects, and major power generation projects to serve the whole region, regardless of national boundaries, are either well down the project pipeline or already in place.

One project which fits into this scenario is the offer by Namibia's power utility NamPower to provide a funding loan to Zimbabwe Power Corporation (ZPC) that will refurbish and expand generation capacity at two thermal power stations. The pay-off for NamPower would be a guaranteed supply of electricity from Zimbabwe.

In 2018, the 800-megawatt (MW), gas-fired Kudu power station is scheduled to begin feeding power to the national grid. Until then, and with growing demand from the mining sector in particular, Namibia has a significant power supply gap in terms of local generation capacity. In 2012, the country imported about 53% of its required electricity from neighboring countries.

Covered by the funding/power export deal, ZPC will increase generation capacity at its power plants in the capital Harare to 120 MW from 50 MW, and at the plant in Bulawayo, the country's second-largest city, to 90 MW from 30 MW. Currently, Zimbabwe is generating only half of the 2,200 MW of power supplies it needs.

In 2007, NamPower loaned Zimbabwe Electricity Supply Authority (ZESA) $40 million to refurbish four units at the coal-fired Hwange Power Plant, for which it secured supplies of 150 MW for five years.

"Our deal with ZESA over Hwange is ending in 2014, and our expectation is that it should be the benchmark if we finalize an agreement to loan them money to refurbish the two stations," said NamPower Managing Director Paulinus Shilamba.

For related information, see July 26, 2013, article - Namibia's 800 Megawatt Kudu Project Prequalifies 15 Out of 45 Bidders, and October 30, 2013, article - Uranium Drives Namibia's $100 Million Power Upgrade.

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