07 June 2014, Windhoek – The construction of the much-anticipated 120 megawatts (MW) thermal solar power plant in Arandis is still awaiting the finalisation of a support agreement between the Government and the plant’s management.
The government’s support agreement will cover a certain numbers of risks, such as political risks, which the company is not able to address.
The political risks refer to the prospect of an investment returns suffering as a result of political changes or instability in a country. Instability affecting investment returns could stem from a change in government, legislative bodies, other foreign policy makers or military control.
The Namibian government is still to sign that support agreement before the commencement of the construction of the power plant.
The Arandis Thermal Power Plant’s managing director, Ezio Vernetti, told Nampa yesterday that the last outstanding step to get the power station up and running is the finalisation of this government support agreement to cover a certain number of risks which neither Nampower nor the power plant is able to address.
These risks include, among others, political risks. He said the agreement is expected to be signed before the end of this year, and that construction will commence immediately.
Vernetti said the company has almost finalised the power agreement negotiations with Nampower, and fully secured access to N$3 billion to be invested in the construction of the power plant.
The development of the 120 MW hybrid heavy fuel oil power-generation plant in Namibia is aimed at contributing almost 25% to Namibia’s power requirements.
The planned solar plant is called ‘hybrid’ because it is where thermal and solar energy will merge. Currently, Namibia imports more than 60% of its electricity needs from neighbouring countries.
The plant, which is expected to be up-and-running in 2016, is considered as a short term, critical energy supply project until the Kudu gas power project starts functioning in 2018.
The Kudu power project is also set to increase power production in Namibia.
The main elements of that project are the development of the Kudu gas field and the construction of an 800 MW combined cycle natural gas-fired power station near Oranjemund in southern Namibia.
When completed, this power station will feed Namibian and South African power grids, a project being developed by NamPower.
Meanwhile, the Arandis power plant is said to consist of eight 15MW heavy fuel oil (HFO) engines and a ninth being a solar park with a capacity of up to 50 MW of photovoltaic panels.
Arandis Power is developing this initiative in association with the private utility company Copperbelt Energy Corporation of Zambia.
“The technology we are buying from Finland is for the thermo plant, so we are also developing the plant in partnership with a Finland-based company called Wärtsilä”, Vernetti said.
Wärtsilä is a Finnish corporation which manufactures and services power sources and other equipment in the marine and energy markets. Their core products include large combustion engines.
Records in 2013 indicated that the company was employing 18 663 workers in more than 70 countries, and is headquartered in Helsinki.
Vernetti is a member of the Namibian business delegation, which went to Finland on a trade and investment mission recently.