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Namibia Power utility finalising search for Kudu partner

Power transmission11 February 2014, Windhoek – Namibia’s state power company NamPower has received bids for companies interested in becoming a strategic partner in the Kudu Gas powered station near Oranjemund.

The strategic partner is expected to take up at least 20% stake in the plant that will be powered by gas from the Kudu gas fields. Both the upstream and downstream projects are expected to be operational by 2018. The gas fields were discovered in 1974 but have never been developed. The proven reserves are 1,3 trillion cubic feet of gas.

NamPower managing director, Paulinus Shilamba said in an interview yesterday that NamPower was evaluating the bids received for the strategic partner.


On Friday, NamPower signed an agreement with Zambian private firm, Copperbelt Energy Company, which will see the Zambian firm taking up 30% equity and buying power in the range of 200MW to 300MW from Kudu. NamPower will hold 51% stake in the plant. Eskom of South Africa has also been negotiating with NamPower to buy power from Kudu.

The cost of the power station will cost US$1,2 billion. Shilamba said 70% of this money will come from borrowing and 30% (N$2 billion) will come from NamPower’s own cash reservers.

“This money has already been budgeted for. It will come from our own balance sheet,” he said.


Shilamba said the signing of the agreement with the Zambian firm is a clear indication that the long delayed Kudu project is finally taking off the ground.

“In the past, it was all theory but now things are happening,” he said.

The plant is expected to produce about 800MW to 900MW of electricity of which half will be consumed in Namibia and the rest will be exported.

“This will be too much power for Namibia if we add existing plants like Ruacana. With the government supporting Kudu, we are confident that power will be flowing by 2018,” said Shilamba.


The Kudu project, which has the potential of tripling NamPower’s generating capacity counts amongst the largest of the company’s future projects.

The project gained momentum when NamPower and the National Petroleum Corporation of Namibia (NamCor) signed Kudu Gas to Power Project Development Agreement (PDA) last year.

The PDA brings together the upstream (offshore development) and the downstream (power station development) to ensure that each aspect proceeds through engineering and design to a final investment decision in a coordinated manner.

The PDA also includes Gas Sales Agreement (GSA) heads of terms and provides the basis for further commercial negotiations pertaining to a final GSA following upstream completion of Front End Engineering and Design (FEED).

On signing the PDA, the upstream partners issued FEED invitations to tender for both sub-sea facilities and the Floating Production System and awarded a contract for an offshore survey of the field area and pipeline route. The FEED work will result in a refined cost estimate for the project, which is critical information to enable all stakeholders to make a final investment decision.

Of the upstream partners, Namcor has 54% equity interest in the production licence, together with partners Tullow Kudu Limited (31% operator) and CIECO Namibia (15%).


– Namibian

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