City of Windhoek in power crunch
A new second electricity bulk supply point is to be built within Windhoek with N$72 million already secured from the National Planning Commission Development Budget according to a Windhoek Council meeting held last week. This project is in response to the City’s looming energy deficit if the Van Eck distributor is not augmented soon.
The City of Windhoek energy demand has grown significantly and continues to grow at a more accelerated rate due to residential, commercial and industrial developments throughout the capital. The 36-month project is set to start this month and requires a total funding N$126 million.
Councillor Moses Shiikwa in Municipal Council minutes instructed Council to consider that the second supply point not only cover the City of Windhoek’s ten year electricity capacity requirement of 50 MVA, but also be designed in line with standard transmission planning for a 30 year horizon by including higher voltage (132kV) equipment once the expected demand has been exceeded.
Councillor Shiikwa also suggested that the transmission station to be located north of Otjomuise Extension 10, be completed next year.
Given the current electricity demand forecasts, the existing installed capacity at NamPower’s single supply point to Windhoek, the 220/66kV Van Eck Transmission Substation, is expected to be surpassed before the year 2020.
A second option is also considered for securing the required additional funding for the project. If the City Council makes an immediate upfront payment of N$52 million to NamPower from a N$68 million purse provided by Central Government for service provision in low cost areas, the downstream funding will be reduced.
Nampower Managing Director, Paulinus Shilamba agreed in the second 10-year Power Supply Agreement with the City that the Khomas Substation proposed for the Otjomuise site, east of Matshitshi Street, supply a voltage of 66,000 Volt with a Notified Maximum demand of 15 MVA. It was also agreed that the payment of N$63 million be effected in five installments with an initial deposit of N$27 million.
According to Council’s monthly meeting, withdrawal from the low cost areas fund is justified since a significant capacity of the new electricity demand would be from the north-western suburbs that are expected to grow with the current service provision.
Maximum demand has already surpassed the 160 MVA notified peak demand based on the only power supply available for the city from the Nampower Transmission Substation.
In the event that financing is sourced from financial institutions and not Central Government or their own resources, the Council will be forced to submit an alternative financing model with associated costs for approval.
The total requirement of N$126 million will be secured by the City of Windhoek from the Namibian capital market. Launching the first-ever municipal bond has been mooted earlier by the Council, specifically for utilities.
A NamPower document states that should the project not be completed in time, NamPower hold the right to renegotiate the Capital Contribution Payment Schedule to meet the capital requirements for the project.
The power supply agreement between the City of Windhoek and NamPower limits the notified maximum demand to 160 MVA, which is currently the only available supply capacity dedicated to the City.
The application for an additional 50 MVA from a new second bulk supply point will bring the total available supply capacity to 210 MVA.
However, it is envisaged] that the new total notified maximum demand will be increased to 175 MVA so that energy demand correlates with current and average monthly peak demands recorded.