NamPower courts investors for Kudu
NamPower has kick-started the process of looking for investors for the US$1.23 billion-estimated Kudu power project by issuing a pre-qualification tender for potential strategic equity investors.
The power utility issued the tender on Wednesday for the largest power project in Namibia. The tender will be opened until 09 August 2013.
NamPower said it had already received several inquiries from prospective investors even before issuing the tender notice. International media reported last Friday that two leading international energy companies, EDF and Alstom had expressed interest in becoming potential strategic equity partners in Kudu Power.
However, NamPower said, of the two, only UK energy giant EDF had expressed interest to participate in the Kudu project as potential equity partner as well as an Operation and Maintenance contractor. It said French based Alstom had only participated in the pre-qualification of the Engineering, Procurement and Construction tender.
The envisaged power station, which will generate 800MW, will be the first power station in southern Africa to utilise the Combined Cycle Gas Turbine technology regarded as the most efficient and environmentally friendly proven large-scale electricity generation technology currently available.
In addition, the power station will also incorporate a Gas Insulated Switchgear substation which will connect the power plant to the national transmission grid. As a result, NamPower said it is looking for strategic technical partners that have proven experience in developing similar sized gas-fired power stations around the world to co-invest in the project.
The Kudu power project is to be developed through a special purpose company, Kudu Power, in which NamPower intends to hold a 51% equity stake. The project, estimated to cost about US$1.23 billion upon completion, including financing costs will be funded through sponsor’s equity and debt funding.
KuduPower is seeking to raise about US$864 million of senior debt financing on the assumption that the prudent gearing for the project would be in the range of 70:30 debt:equity. The portion of equity available to investors under this procurement process is expected to fall in the range of 19% to 49% (US$70 million to US$180 million) depending on the outcomes of negotiations with off-take investors.
NamPower said although there has been some scepticism over the years with regards to the development of the Kudu gas to power project, all the development partners on both the upstream and downstream development as well as the Namibian Government are fully committed in ensuring that the project is implemented without further delays.
“We are therefore calling upon all stakeholders particularly within Namibia to fully rally behind the project, and provide all the necessary support that may be required,” NamPower said.
NamPower will be the sole off-taker of the power generated by the power station to be located at the Uubvlei site, north of the town of Oranjemund through a power purchase agreement between NamPower and KuduPower.
However, as NamPower’s domestic electricity demand is not sufficient to utilise the entire output of the power station, the power utility is expected to enter into power export agreements with regional off-takers who will purchase surplus power not consumed locally.