German loan to develop energy sector

Signed and sealed. The Minister of Finance, Hon Calle Schlettwein (left) last week signed an agreement with the German Federal Government, represented by the German Ambassador, HE Onne Hückmann, for a loan of more than N$600 million to develop the energy sector.

Another agreement for financial co-operation between Namibia and Germany was signed last week by Hon. Calle Schlettwein, the Minister of Finance, and HE Onno Hückmann, the German Ambassador, to make available a loan from Germany exceeding N$600 million for developing renewable energy, and for ensuring demand-side energy efficiency.

The intergovernmental agreement on Financial Cooperation will provide, “a preferential loan to finance projects on renewable energy and energy efficiency through NamPower. The main objective of the programme is to ensure a stable and reliable power supply in the short and medium-term and to support a sustainable long-term power mix consisting of renewable and fossil resources.”
Both approaches are motivated by the need to increase energy efficiency against a background of looming electricity shortages.
Specific projects to be funded through the programme are the rehabilitation of the three turbines at the Ruacana hydro power plant and the construction of transmission lines from Gerus to Otjikoto and from Kuiseb to Walvis Bay.
Refurbishing of the Ruacana turbines have become necessary to improve efficiency and to ensure stable electricity generation even when the Kunene River is at its lowest.
The viability of upgrading existing infrastructure has been proven by NamPower through its current refurbishment programme for the Van Eck power station outside Windhoek, a project which is expected to be completed by the end of 2016.
At Ruacana, NamPower wants to increase generation capacity by an extra 15 megaWatt through improved operation. Earlier this year, NamPower announced it has replaced the runners on all three units, the first in May 2014 and the last in February this year. About N$108 million of the loan is allocated for Demand Side Management. A part of this money is earmarked to support the intended NamPower project to exchange one million light bulbs in households with energy-saving LED’s free of charge. Funds will also be allocated to subsidize the replacement of 20,000 traditional warm water geysers with energy-efficient solar water heaters.
At the signing ceremony, Ambassador Hückmann emphasized that: “Energy is an enabler for economic growth. The agreement signed today will play a vital role in reducing the dependency on power imports, supporting Namibia’s promising economic development and transformation into a modern diversified economy.”