THE Development Bank of Namibia (DBN) has signed an agreement to provide N$193 million to finance a new solar power-generation plant near Kahn substation in the Namib Desert.
This plant, owned by Anirep Aussenkjer Solar One – a start-up energy company, will feed 20 MW into NamPower's grid at Kahn substation.
The start-up company won a 25-year tender to produce power for NamPower and is jointly owned by two local partner companies, Anirep Solar and Aussenkjer Energy Investments.
Anirep is listed on the Namibian Stock Exchange.
The solar plant will be located 40 km from Usakos and will be developed by HopSol Africa. Anirep owns a majority stake in Hopsol.
DBN head of marketing Jerome Mutumba said with local production of electricity, Namibia will reduce reliance on imports.
He said viewed over the short, medium and long-term, local generation is highly variable because Namibia's largest power-generation facility, Ruacana Hydroelectric Power Station, depends on the Kunene River whose levels fluctuate.
He illustrated the impact of the levels of the Kunene River by saying that in July 2021, power production from the Ruacana Hydroelectric Power Station fell by 87,5%.
Mutumba said this decline points not just to the need to develop local power generation, but also the need for stable sources of generation, such as solar.
Fluctuation in generation leads to fluctuations in costs, which have an impact on Namibia's deficit, as well as on the medium- to long-term costs of industry as NamPower and regional distributors have to adjust their costs.
By stabilising power generation, he said, Namibia can become a more attractive destination for investors seeking opportunities in Namibia's industrialisation drive.
On privately owned solar generation facilities, Mutumba said independent power producers are an ideal position to promote economic inclusiveness.
Presently, a small solar power plant can conceivably be financed over a period of 10 years. With an off-take agreement of 20 to 25 years and a stable purchasing regime over an additional 10 to 15 years, this leaves an enterprise resource that can be maintained, expanded or diversified.
Mutumba said solar generation has benefits all round and urged all stakeholders to approach the bank to examine business models and potential for future projects.
Business Journalist at The Namibian