Nampower in Talks to Sell Electricity to S. Africa’s Eskom

Namibia Power Corp. said it’s in talks to sell as many as 300 megawatts of capacity from its planned Kudu gas-fired plant to Eskom Holdings SOC Ltd., the South African power utility that’s struggling to meet demand.

“The discussions that have been ongoing are with regards to the possible off-take of 100 to 300 megawatts from the Kudu power station,” S. Muyenga-Muyenga, a coordinator at the 1,050-megawatt project, said in an e-mailed response to questions yesterday. The facility, which will cost about $1.3 billion, will use gas from the Kudu fields about 200 kilometers (124 miles) off the southern Namibian town of Oranjemund and will start delivering power in the first quarter of 2018.

Nampower owns 51 percent of the Kudu plant while Zambia’s Copperbelt Energy Corp. has a 30 percent equity stake. Nampower has evaluated bidders for the 19 percent stake and is checking their governance structures before taking a decision, Muyenga-Muyenga said. Eskom hasn’t expressed interest in the stake.

Eskom is struggling to keep the lights on in South Africa, which has the continent’s biggest economy after Nigeria, because of a decade of underinvestment in power plants. The utility is spending about 500 billion rand ($47 billion) in the five years through 2018 building facilities to keep up with demand. Namibia is building the Kudu station to cut reliance on power imports, which it uses to meet about 53 percent of its needs.

“There has been huge interest from the international market, and in actual fact all the bidders requested for more shares over and above the offered 19 percent,” Muyenga-Muyenga said.

Eskom declined to comment, the company said in an e-mailed response to questions.

To contact the reporter on this story: Felix Njini in Windhoek at fnjini@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Ana Monteiro, John Viljoen

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