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Namibia spends N$26 billion on electricity imports

Fri, 3 March 2017 23:03
by Rodney Pienaar
Business

 

Namibia energy imports exceeded exports by close to N$26 billion in 2016, with electricity as one of the top imports. According to the finance minister, Calle Schlettwein, Namibia misses out on domestic economic activity and value addition because it does not generate electricity not producing electricity.

He said this exposes the country to electricity pricing and currency fluctuations. “The availability and affordability of electricity is an important factor in attracting investments. “Namibia exhibits electricity tariffs that are higher than most countries in the Southern African region. “When compared against industrialized developed nations, Namibia’s average industrial level is significant above that of the European Union,” Schlettwein said.

He added that the country therefore needs to strike a careful balance between the nature and scale of investments affordability for both the consumer and the exchequer. The electrification rate in Namibia is slightly above the average in sub-Saharan region but below average across developing countries end even Africa as a whole. Renewable energy presents and exit ing opportunity for Namibia as the country has been endowed with many natural resources and fossil fuels are not one of them.

Schlettwein reiterated that Namibia has excellent solution for off- grid connectivity. “On the other hand, Namibia has some of the best renewable energy re sources; we have world beating solar locations for both PV and CSP installations.

“We have very suitable locations and available space for wind energy generation with locations where the power productions profile closely matches the time of day electricity demand for Namibia. “We have an excellent opportunity of turning bush encroachment into an opportunity to achieve the twin benefits of electricity generation and at the same time gaining usable land,” he further said.

He further noted that as per recent assessment made by the African Development Bank (ADB), power demand in the country is projected to grow smartly at close to 9.5% per year between 2015 and 2020 on the back announced industrial projects. Access to electricity remains an important issue, according to recent estimates of International Energy Agency (IEA), over two third of the country’s population does not have access to electricity and rural areas disproportionately suffer from this exclusion.

According to Schlettwein, investment in the energy sector needs to be scaled up while ensuring that solutions are affordable and are technically compatible to the country’s needs. “We need to be cognisant of the fact that Namibia is a small economy, this is reflected both in term of state finances and energy need of our electricity system. “The demand for electricity in Namibia is several times lower than production capacities single power generation projects that are routinely built around the world.

This should intuitively tell is that we should stand behind the scale of the project that are manageable for an economy size,” Schlettwein said. He added that the state must plan and communicate detailed output requirements from projects upfront. This is also important to facilitate competitive procurement such that financial offers from various competing bidders are truly comparable.