7 May 2008

Namibia: Nampower Secretive About Zim Coal Loan

Windhoek — NAMPOWER has guaranteed a US$16 million loan to an unnamed Namibian company to enter into a joint venture with a Zimbabwean coal-mining enterprise.

It comes on top of the US$40 million that NamPower advanced to Zimbabwe's coal-fired Hwange power station last year in return for 40 megawatts of electricity supply to Namibia.

John Kaimu, NamPower's Marketing and Corporate Communications Manager, yesterday confirmed the parastatal's role as the facilitator of the loan guarantee but declined to identify the recipient.

The loan will facilitate the anonymous Namibian company's business with Zimbabwe's Hwange Colliery, which supplies coal to the Hwange power station.

"It is a matter between the Zimbabweans and the Namibian company," Kaimu said, despite probing by The Namibian.

"There is no need for NamPower to get involved in coal mining," Kaimu told The Namibian.

"But we identified the necessity that increased coal production was required in Zimbabwe back then when we were thinking of supplying the Hwange power station with a loan for refurbishment to reach its 480 MW capacity," Kaimu added.

"We merely acted as a facilitator for this US$16 million loan via the Namibia Chamber of Commerce and Industry (NCCI)," he added.

Four Namibian companies were apparently shortlisted and the Zimbabweans chose one of them."

NCCI boss Tarah Shaanika said he could not remember which four companies, saying the NCCI also acted just as a go-between, informing its members that such an investment opportunity was open in Zimbabwe.

"Our members were requested to directly get into contact with NamPower," Shaanika told The Namibian.

The Namibian bank backing up the loan is said to be Nedbank, a source in electricity circles told The Namibian.

According to the Zimbabwean newspaper The Herald, "the money would be released through some banks in Namibia and would be guaranteed by NamPower."

The still to be identified Namibian company has come to the rescue of a cash-strapped Hwange Colliery in Zimbabwe, which is badly in need of expanding and recapitalising to produce more coal to feed that country's coal-fired power stations.

According to the Zimbabwean news reports, the NamPower board of directors decided last week to apparently guarantee the US$16 million (about N$120 million) loan.

The money search was also facilitated through NamPower, which already forked out US$40 million last year to the Hwange power station in Zimbabwe.

NamPower pays for that electricity, but at a cheaper and preferential price, and the difference with the actual price per megawatt (MW) is regarded as the loan 'repayment'.

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