16 Oct 2014 15:30pm
WINDHOEK, 16 OCT (NAMPA) Power utilities NamPower and Zimbabwe Power Company (ZPC) on Thursday signed a new power-purchase agreement (PPA) in Windhoek.
ZPC will sell 80 megawatts (mw) of electricity to Namibia for a period of 15 years at the cost of US$ 150 million (approximately N.dollars 1,5 billion).
NamPowers Managing Director Paulinus Shilamba and ZPC Managing Director Noah Gwariro signed on behalf of their companies.
ZPC is a subsidiary of the Zimbabwe Electricity Supply Authority (ZESA).
This new arrangement positioned ZPC as one of NamPowers most important trading and strategic energy-trading partners in the southern African region.
The new PPA forms part of ZPCs strategy to raise funding to enable the two entities to expand the Kariba South Hydro-Power station in Zimbabwe by 300mw.
For NamPower, the new agreement forms part of short and medium-term initiatives to address the immediate power supply shortages in the country.
Namibia imports about 60 per cent of energy from neigbouring countries, of which about 30 per cent comes from Zimbabwe.
This makes the country vulnerable in terms of power supply, as any negative development in neighbouring States will have a corresponding negative effect on electricity supply in Namibia.
The agreement will become effective not later than 01 April 2015 when the 150mw Hwange agreement comes to an end in March next year.
Speaking at the signing ceremony, NamPower board chairperson Maria Nakale explained that the agreement is structured to supply up to 450Gigawatts per hour in a calendar year, and is profiled to supplement the seasonality of the Ruacana Hydropower station.
The term of this agreement is 15 years, but the capacity will have the option to be reduced to 50mw after 10 years from the date of coming into operation of this agreement, she explained.
In 2006, NamPower and ZESA embarked on a joint project development to rehabilitate the Hwange power station in Zimbabwe.
NamPower then availed US 40 million (approximately N.dollars 400 million) to ZESA to rehabilitate that power station.
In return, ZESA provided NamPower with 150 mw for a period of five years as part of the repayment of the loan.
The agreement became effective in 2008, and was further extended by at least two years.
It is expected to end in March 2015.