DBN encourages setting up of projects in renewable energy

24 Oct 2018 17:10pm
WINDHOEK, 24 OCT (NAMPA) – Privately owned solar generation is a significant force for the future of Namibian enterprises, Development Bank of Namibia (DBN) Head of Marketing and Corporate Communication, Jerome Mutumba has said.
Mutumba, in a media statement on Wednesday, said the majority of Namibia’s electricity supply is imported, a factor that limits confidence of investors who would like to set up solar power generation initiatives in Namibia.
He said if the critical component of electricity to power industrial processes is not available or is priced too high, economic development predicated on industrialisation will experience a sluggish ascent.
Mutumba said despite a moratorium on implementation of new solar photovoltaic feeds into the national electricity grid currently in place, solar photovoltaic plants can still lend impetus to Namibia’s drive for industrialisation.
If Namibia is to compete for investments in the electricity supply sector, a model has to be provided which is cost efficient for industrialists and one that gives them security of supply, Mutumba said.
“The differences in tariffs across the regions obviously make countries which offer lower electricity costs and greater local generation capacity far more attractive to industrialists,” he said.
Mutumba advanced a model in which enterprises can own their own distribution capacity in the form of renewable energy, particularly solar.
To illustrate the model, he cited DBN-financed solar power facility Sun EQ, which provides electricity to Ohorongo Cement.
The Sun EQ facility, he said, secures the supply of electricity under an offtake agreement with Ohorongo, and also gives both entities the ability to agree on rates that make Ohorongo sustainable.
In terms of financing, Mutumba said a facility of this nature may be financed over a period of 10 or more years, out of an estimated lifespan of up to 30 years.
“Although the repayment is required for the period of 10 or more years, this can be recovered from sales of electricity during that period, subsequent to which the cost of generation falls substantially, and the gains can be used either for growth or in anticipation of future replacement.”
(NAMPA)
CT/PS/ND