Namibia to Sell 49% Stake in $1.1 Billion Gas Power Plant

Namibia Power Corp., a state-owned electricity supplier, plans to sell 49 percent of the $1.1 billion gas-fired power plant it’s building.

The southwest African nation by March 2014 will announce the winning bidders for the engineering and design of the Kudu gas field and the construction of the 800-megawatt plant it will feed, Muyenga Muyenga, the project’s manager, said in an e- mailed reply to questions on April 26. The offshore field is about 200 kilometers (124 miles) off the southern Namibian town of Oranjemund, according to the Mines and Energy Ministry.

“The rough estimated cost of the Kudu gas-field development will be about $1 billion, whereas the rough estimate for the Kudu power station is about $1.1 billion,” he said. “NamPower currently has 100 percent shareholding in KuduPower (Pty) Ltd., and it is in the process of farming out 49 percent to prospective strategic equity partners.”

Namibia plans to exploit offshore gas fields to produce electricity and reduce reliance on imports, which comprised 53 percent of power used in the year through July, NamPower said in its 2012 annual report. The country will probably face a power shortfall in 2016 because of growing demand, according to the Economist Intelligence Unit.

The nation also wants to reduce its 54 percent interest in the Kudu gas field to 30 percent, Managing Director Obeth Kandjoze said on April 23.

Maamba Talks

NamPower held informal talks with Maamba Collieries Ltd., the Nava Bharat Singapore Pte Ltd. unit that’s building a coal mine and power plant in Zambia, over the potential construction of another 300-megawatt plant, said Reiner Jagau, the general manager of power-system development at the utility. The plant would be built near Katimo Mulilo on the Namibian side of the border it shares with Zambia, burning coal imported from Maamba, he said in an e-mailed response to questions.

“Namibia cannot afford two base-load power plants such as Kudu and coal,” Jagau said. “Currently, NamPower is concentrating its efforts to finalize the Kudu feasibility study to be able to take an investment decision by the first quarter of 2014.”

The government wants the first gas production from the offshore field by 2018. Exploration off Namibia, where 18 wells have been drilled, has so far focused on Kudu, still untapped since its discovery in 1997.

Namibia is the world’s largest producer of offshore diamonds and the fourth-biggest uranium producer. The country had installed capacity of 1,108 megawatts as of July 2012, according to NamPower’s annual report. One megawatt is enough electricity to light about 500 to 1,000 U.S. homes.

To contact the reporter on this story: Matthew Hill in Johannesburg at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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