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NamPower extends Zesa engagement

Mon, 1 September 2014 02:18
by Timoteus Shihepo
News Flash

Zimbabwe Electricity Supply Authority (Zesa) subsidiary Zimbabwe Power Corporation (ZPC) has extended their engagement with NamPower until next year February following protracted negotiations between the two sister utilities, The Villager can reveal.
The initial engagement between the two countries was expected to lapse in October this year. This comes after growing fears that the agreement between the two countries was going to be jeopardized after the expiry of the initial contract in October because both Zimbabwe and Namibia are experiencing perennial power shortages that have also engulfed the rest of the Southern African Development Community.
The extension will see NamPower acquiring 80 megawatts (MW) from Zimbabwe Power Company (ZPC) at an undisclosed amount.
The Villager understands that the ZPC will sell megawatts to NamPower to raise more than US$150m (1b) for power generation projects.
NamPower Managing Director, Paulinus Shilamba who despite not disclosing the amount said the deal will benefit the entire country.
“Right now we are at an advanced level with ZPC. At this stage were at a term sheet stage, we will then move on to the parties’ agreement but I can say the current agreement is almost passed and we expect the electricity either in February or March next year. But I can’t reveal the amount because it’s commercial information.
But all I can say it’s me and you (the customers) who are going to pay for this deal because when we adjusted our tariffs we calculated how much money will go towards NamPower projects,” he said.
However while the extension comes as good news to the country Shilamba revealed that the new engagement with Zimbabwe will see power imports being slashed 160MW to 80MW.
The news coincidence of that Memorandum of Understanding (MoU) which NamPower signed with Angola worth N$800m which will see the state owned utility exporting electricity to that country despite being a net importer of power.
Ironically Namibia is surviving on power imports from Zimbabwe Electricity Supply Authority (Zesa), South Africa’s Eskom and Mozambique’s Electricidade de Mozambique (EDC). In totality Namibia relies on 70% imported power at moderate consumption but the importation can reach 80% on peak periods.
 “The current agreement is coming to an end and in fact it was supposed to come to an end in October but we had to move it to February next year when we get the 80 megawatts. You could say we are replacing the 160 with the 80 so we are trying to overcome challenges that faces the electricity sector,” he said.
The deal is likely to raise eyebrows due to the fact that the country is replacing a 160 megawatts with 80 megawatts at a time were the country is also selling electricity to Angola.
NamPower has been enjoying good engagements with ZESA for a few years now since assisting the Zimbabwean power utility with US$40M to resuscitate an ageing Hwange Power station a few years ago.
As part of concerted efforts to keep the deal between the two countries alive Ministry of Mines and Energy Permanent Secretary Kahijoro  Kahuure visited Zimbabwe two months ago to seal the engagements between the two countries.
Meanwhile Minister of Mines and Energy Isak Katali professed ignorance to the new agreement between Zesa and NamPower saying, " I am  not aware of the deal".
Namibia imports close to 70% of its power needs from regional sister utilities and has also been struggling to sustain its domestic demand because of a growing regional power deficit which is threatening to plunge most countries into darkness.