Namibia: Kudu Project Can Only Be Privately Funded

22 November 2019

Mines and energy minister Tom Alweendo has reiterated that the Kudu gas-to-power project can only be a privately developed initiative, and not a government project.

Speaking at a press briefing in Windhoek yesterday, he said the project is privately funded and the government's intention was only to purchase power from any of the private investors.

The project, whose costs were estimated to run into billions, was reduced from 850 to 442,5 megawatts.

"Kudu gas is one of those projects that has been on our planning horizons for quite a long time, and it did not happen because in terms of the investment required, Kudu gas is not a cheap project," he stated.

The minister noted that there have been a number of investors interested, but they soon realised they could not afford the project.

"We have had private sector people who thought they had enough money to do the installation of the plant, and for us to buy the power. But every time that happens, they come to realise that what they plan on investing is not sufficient," Alweendo said.

"Right now, it is really a matter of the financial viability of that plant, and as long as someone does not see its financial viability, it won't happen. In the meantime also, we have other sources of power generation. We have renewable energy, and people prefer that, and it is even cheaper sometimes. Kudu [gas] is not necessarily the only project to give us power. There are other projects," he continued.

The project has been seen as one that would boost electricity supply in Namibia. It would ensure that gas from the offshore field is transferred to a floating production system, and then piped 170 kilometres to a power plant along the coast at Oranjemund.

In a Nampa article last year, NamPower chief executive officer Simson Haulofu confirmed that power plant would be resized to 442,5 MW in order to consider the power demand load forecast for Namibia. He said this was also to deal with the need for the project's reliance on export agreements to reach financial closure.

Haulofu said the plant was estimated to cost N$9,4 billion, dropping from the previous N$15,6 billion.

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