In the wake of the rationing of electricity supply in Zambia, there is fear of dark days ahead for Namibia as the latter imports 180 megawatts (MW) from its neighbour. However, acting managing director of NamPower, Kandali Iyambo told a local news portal last week the country has secured a “firm” contract with Zambia for uninterrupted power supplies.
“What we have with Zambia is firm. Firm means that it is uninterrupted. It is not source based. We are not sourcing our power from a specific plant, but from the total portfolio. If you enter into a contract and say its uninterruptable, except for force majeure, which is also specified, then they ought to supply and honour their contract with us because its firm,” Iyambo is quoted as saying.
Zambia and Zimbabwe both rely on lake Kariba – the world’s biggest dam – for the bulk of their hydro-electric supply. The record-low water level in the Kariba reservoir for electricity generation at Kariba North Bank Power Station has forced the two countries into a load-shedding mode. The two countries, together with South Africa which is also been experiencing rolling power cuts since 2007, supply Namibia with electricity.
Despite this, Iyambo has reportedly ruled out the possibility of Namibia facing load-shedding due to supply constraints in the three SADC countries, which all export power to the country.
Last Friday Zambia’s minister of energy Peter Chibwe Kapala justified export of power to neighboring countries, adding that president Hakainde Hichilema’s New Dawn Government has taken steps to reduce the exports of electricity to other countries by 100MW in order to mitigate the impact of load-shedding on citizens.
“We understand the difficulties that load shedding poses to our citizens and we are taking steps to ensure that we balance our power exports with the needs of our citizens,” minister Kapala said. “Copper remains the highest export earner for Zambia, but there are limited dollars being remitted back into the country due to the nature of mine ownerships and copper trading. However, export earnings from electricity can have a better impact on the economy, including the strengthening of the Kwacha. This is because ZESCO is wholly-owned by the people of Zambia and the company’s foreign earnings will flow back into the country.”
Namibia imports 180 megawatts (MW) from Zambia after NamPower secured an additional 80MW from the Zambia Electricity Supply Corporation (ZESCO) last April, under a 10-year power supply agreement reported to be worth N$8.5 billion (US$500 million). The reported N$850 million-a-year deal, aims to reduce the country’s dependency on South Africa’s Eskom, which is experiencing acute challenges resulting in Africa’s most developed economy enduring.
Namibia imports a total of 460MW from regional power utilities to meet its daily energy demands of 500MW, and NamPower recently reduced its firm offtake from Eskom by half to only 100MW, with a further non-firm arrangement for 300MW. In addition, the company is also undertaking five power-generation projects and 11 transmission projects aimed at reducing its reliance on imported electricity, the majority of which will be funded through the power utility’s substantial cash and liquid assets.
With Namibia’s domestic electricity supply failing to keep pace with rising demand, and the country generating less than half of the energy it consumes, is load-shedding a near reality for Namibia?
NamPower boss said the State-owned company and the Southern Africa Power Pool (SAPP) will work together to ensure that Namibia will not face load-shedding in the near future, while also working on power-generation projects to reduce the country’s reliance on imported electricity.
“The issue of load-shedding is not foreseeable in the near future at all. It may just mean that NamPower might have to source power from the SAPP to meet the country’s energy demand,” Iyambo said.
Namibia has long relied on imported power from South Africa (Eskom), but South Africa’s Namibia has a power purchase agreement with Eskom which expires in 2025, despite that country’s own economy putting strains on its domestic electricity generation capability and thus its ability to export. NamPower has also diversified its sources of imported power over the short term by signing power purchase agreements with utilities in Botswana, Zambia, Zimbabwe, the Democratic Republic of Congo (DRC), and Mozambique.
As a SAPP member, Namibia, Zambia and other regional utilities assist one another during power supply emergencies. Iyambo stated that in SAPP members actually assist each other as power utilities. “It is on the premise that we assist each other as countries or as utilities when the other utility is facing problems,” she said.
With ample sunshine and wind resources (on the coast), Namibia has the capability to generate significant energy from renewable sources and to become a leader in green hydrogen and related products, including ammonia, methanol, synfuel, and eventually green steel.
Towards that end, government has developed plans toward establishing a hydrogen economy. Touted as the “fuel of the future,” preliminary estimates indicate the country has the potential to produce about 2.5 million metric tons of green ammonia annually, and expects to attract more than USD6 billion in foreign direct investment (FDI) based on its green ammonia and green hydrogen production potential.