07 Feb 2014 15:40pm
WINDHOEK, 07 FEB (NAMPA) NamPower entered into a joint development cooperation and power export agreement with a Zambian power provider to develop the Kudu Power Station project on Friday.
The project is estimated to cost about US.dollars 1.2 billion (N.dollars 132 billion), and aims to increase power-generation in Namibia.
The main elements of the project are the development of the Kudu gas field and the construction of an 800 MW combined cycle natural gas-fired power station at Oranjemund.
When completed, the power station will feed Namibian and South African power grids.
NamPowers Managing Director Paulinus Shilamba and Michael Terney of Copperbelt Energy Corporation (CEC) signed the agreement in Windhoek on behalf of their companies.
The contract states that NamPower will have a 51 per cent share, CEC 30 per cent, while the rest will be offered to a third party yet to be identified by the end of March this year.
Speaking during the signing ceremony, NamPowers board chairperson Maria Nakale said the project has reached the stage of having advanced all the tenders on the project - inter alia the EPC tender, strategic equity investor tender, coordinating bank tender as well as the operations and maintenance tender, which are at various stages of bid evaluations.
The CEC had shown an interest in off-taking 200 to 300 megawatts (MW) of power from Kudu to be denominated in US dollars.
This has lessened the foreign exchange risk exposure, as the residual exposure is now slightly more manageable, explained Nakale.
The chairperson said there are several other avenues which NamPower, the Electricity Control Board (ECB) and the Namibian Government are investigating to further reduce the residual exposure.
The CECs expression of interest to off-take about 200-300 MW, and the subsequent discussions and negotiations that have been ongoing since 2011 have finally paid off as our teams of officials concluded in October 2013 the joint development and power-export agreement term-sheet negotiation, she said.
Nakale further noted that the CECs interest to participate in the Kudu project as investors/shareholders definitely demonstrates without a doubt their full commitment in ensuring that this project is successfully implemented and commissioned by the end of 2017, latest in the first quarter of 2018.
The Kudu project will be the first large power station to have been developed in Namibia by the Namibian Government.
It is equally going to be the first combined cycle gas turbine power station of this size in the Southern African Development Community (SADC) region, if not in the whole of Africa, she enthused.