With a national plan for more investment into renewable energy, energy experts predict that Namibia can be a renewable energy nation in the near future, but warn that an energy mix is required to ensure security of supply. As renewable energy experts converged in Windhoek this week for the conference on Sustainable Development for Namibia in view of COP 21, discussions surrounding the funding of renewable energy, legal framework and reforms of the national power utility, Nampower, took centre stage.
In fact, delegates expressed concern over the vast tracts of land taken up by renewable energy projects such as wind farms, cumbersome land acquisition process for investors and the need for Government to integrate its systems to ensure that projects such as houses and public offices give priority to renewable energy sources.
One of the delegates suggested that all public funded houses should be fitted with solar panels.
Experts believe that Namibia complies with all the requirements to meet the renewable energy goals because of the abundant sunlight and wind. Currently, a huge chunk of Namibia’s energy needs goes to the mining sector. “It is time to embrace renewable energy. In fact, it will be great if it can be part of the energy grid. But the power produced should be reliable and affordable,” said Chamber of Mines CEO Veston Malango.
Malango called on investors to focus on putting up renewable power plants.
“We need serious investors in this country, they want Government guarantees but only some deliver, others just talk,” he lamented.
Daniel Zinman from the Rand Merchant Bank, said the international bank stands ready to support Namibia’s renewable energy projects because of its credit worthiness.
Zinman said African governments tend to follow the project financing model when embarking on such projects. “Generally, given the scale of these energy programmes, it makes sense for the fiscus rather to utilise the broader universe of private sector funding than burden the government’s balance sheet,” Zinman said. Zinman also outlined the criteria used by commercial banks and development financing institutions when considering funding energy projects.
Policy certainty and clear legal framework, creditworthiness, bankable documents, good line of sight for future opportunities and access to long-term funding are some of the areas that financiers look at.
“Hopefully, I have proved that Namibia is well placed when it comes to most of these criteria, and while there may be some advancements that need to be made in terms of the bankability of the suite of project documents, it is obvious why a number of investors and funders are so eager to commit funds to the Namibian energy sector,” he said.
Ensuring security of supply
Government has vowed to ensure that the country’s electricity supply is secure, hence the efforts to create adequate conditions for investments. Mines and energy minister Obed Kandjoze stressed the need for the creation of conducive conditions attractive for new investments in the sector.
“The country’s security of supply has been an agenda item for the past 14 months, ever since my assumption of duty as Minister of Mines and Energy. I expect that our IPP Policy will create the necessary conditions to be investor friendly, on the one hand, without necessitating unreasonable Government guarantees,” he said.
Kandjoze further urged the private sector to play its role in addressing the future electricity needs of the country, by doing so, also alleviating the funding burden from Government, relieve the borrowing requirements of our national utility, and introduce much-needed competition and new innovative technologies to Namibia.
“The private sector has a definite role to play, not only in introducing new technologies, or attract funding, but also to catalyse development. There are numerous opportunities for the private sector, ranging from conventional electricity supply solutions, to innovative off-grid business models, and investments in embedded and distributed generation,” he said. Currently, there are 14 Independent Power Producers in the process of constructing power plants using our abundant renewable resources.
Delegates wanted to know when the next round of applications will be rolled out.
Kandjoze, however, indicated that the project was a one-off initiative.
“Under the Electricity Control Board’s Interim REFIT Programme, 13 of these IPPs have opted to invest in solar photovoltaics, and we have one IPP who intends to generate electricity using wind,” the minister revealed.
“Considering that we are still in the infancy phase with regard to the establishment and operationalisation of IPPs in Namibia,” said Kandjoze, adding “This is a good first step towards diversifying the national electricity supply.” “The Renewable Energy Policy will therefore formulate an approach in which we can incentivise investments in firm renewable power generation options, such as power generated from biomass power plants, hydro power and possibly geothermal and wave power. This is exciting, and will hopefully further unlock Namibia’s vast natural wealth of renewable energy sources,” he said.
Energy reforms needed
The Renewable Energy Industry Association of Namibia (REIAN) has called on Government to compel all entities to ensure that their buildings are optimised towards energy usage.
REAIN’s General Manager, Harald Schutt, suggested: “Build them [buildings] in a way that they don’t get hot instead of [installing] AirCons and include PV in the roof structure from the beginning,” he proposed.
Schutt cautioned against installing a centralised, fossil-based electricity supply system nationwide, as that would be problematic in Namibia because of the low population density and widespread poverty.
“[We should] learn from new developments that our previous colonisers paid for dearly, meaning we opt for a de-centralised, renewables based concept, that will produce electricity where we need it and keep the money circulating among Namibians instead of taking it out to benefit a few of us and finance development elsewhere,” Schutt said.