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German Bank Extends Financial Support to NamPower

Mon, 16 February 2015 05:55
by Kudzai Chimhangwa
Business





The  German Development Bank (KfW) has provided financial support to NamPower with two major projects worth N$450 million having been successfully completed under the framework of Namibian-German financial co-operation.
The assistance comes at a time when Namibia is facing an imminent power supply shortage owing to a shortfall of electricity imports from the SADC region.
On request of the Namibian government, KfW, is supporting NamPower in the preparation of new projects to extend existing generation capacities and to promote renewable energies.
The bank has availed N$4 million to prepare the Kudu Gas to power project modalities in order to structure the projects financially.
In November last year, a financing agreement of N$11, 7 million was signed between NamPower and KfW for project preparation facility.
Under this facility experts shall assist NamPower to explore the possible use of the divulging encroacher bush for Namibia’s power supply on the one hand and this has been allocated N$7, 7 million.
On the other hand, the remaining 35% has been allocated for the Kudu Gas to power project.
Windhoek KfW Office Director Michael Jainzik told The Villager that the objective of this support was aimed at ensuring a sufficient and sustainable energy supply for the country.
“Currently, KfW is supporting NamPower in the preparation of the short term critical supply program where energy efficiency measures in private households, as well as in generation and transmission facilities shall be financed,” said Jainzik.
He said that this was in order to overcome supply deficits Namibia may soon be facing soon due to the shortfall of electricity imports from the region.
The facilities comprise expert support of 12 months for the Kudu gas to power project and 24 months for biomass to power project.
The tender for the Kudu gas to power project preparation has been published on NamPower’s homepage with an April 10 deadline set while the tender for the biomass to power project preparation is also imminent.
Last week, NamPower presented a tender for competitive bidding related to consulting services to support the NamPower finance team in the preparation of the Kudu Gas to Power and associated transmission infrastructure.
The contract will include consulting services to assist NamPower to augment its in-house capacity in the finance department and to bring the transaction to financial closure in the anticipated time frame.
The contract is expected to commence in the second quarter of this year.
The terms and conditions attached to the bank’s project funding were not immediately availed.
“These grants are not at all tied to later German financial support thereby allowing maximal flexibility to the Government of Namibia and NamPower to obtain the best loan facilities from any financial institutions when financing later investments,” he said.
Meanwhile, in a bid to enhance procurement and ensure equitable distribution of resources in Namibia, power utility NamPower has opened tendering space for local companies.
As part of the new policy termed NamPower Equitable Economic Empowerment Policy (NEEEEP), the utility has erased a clause in its provisions that requires local tender bidders to put upfront a form of security for business with the power utility.
The usual procedure is usually the placing of a 10% security guarantee which serves as a bond.
NamPower Managing Director Paulinus Shilamba said that the tender price will however, always be an important determining factor for selecting tenderers.
 “The tender bond or security shall be waivered for tenders below N$10 million if it can be demonstrated that its absence does not result in any incremental financial or operational risk to NamPower,” he said.
This development comes against a background where many local companies had expressed consternation at the bond requirement which they felt effectively elbowed them out of the tendering process, in favor of foreign entities.
Suppliers bidding for NamPower tenders are to be rated for NEEEP compliance based on a newly formulated scorecard.
“Only suppliers with an overall minimum score of 50% are to be considered as NEEEP compliant and shall be classified and registered as such on the NamPower vendor master data,” he said.
The scorecard pillars for awarding points will use five criteria for determining suitability in particular, ownership, management control and employment equity, human resources and skills development, sub-contracting through second tier PDN supplier procurement as well as community investment through social corporate investment.
Shilamba said that in order to give credence to its drive for an equitable economic empowerment framework, NamPower may consider relaxing the normal financial and commercial evaluation requirements when a new business is being developed or when the PDN company resident in the area where the services are required is competing with companies from elsewhere.
NamPower has since established a sliding preference point scale for awarding tenders. The specific preference point scale applied to a tender is determined by the value of that specific tender.