The National Petroleum Corporation of Namibia (Namcor) is adamant that the much-anticipated N$35 billion Kudu gas-to-power project, which has been touted as the answer to the country’s electricity woes, is feasible and bankable.
In fact, Namcor has already spent N$285 million in executing a cabinet directive to develop the Kudu gas field.
While presenting Namcor’s annual results and introducing Immanuel Mulunga as its new managing director, the corporation’s chairman, Johannes !Gawagab, said they hoped to finalise the technical operator and all final contracts for the project by the end of December.
“The strategic importance of Kudu to Namibia cannot be over-emphasised, as it will ensure energy security for achieving the targets of Vision 2030 and NDP4; will realise the macro-economic benefits of a gas resource, and will ensure Namibia’s electricity tariffs remain competitive,” said !Gawagab.
Although the Minister of Finance, Calle Schlettwein, recently said the project is not financially viable and would have serious consequences for the country’s budget, !Gawagab yesterday said: “The choices we make today regarding oil and gas will determine the future of this country for many years to come.”
!Gawagab said that a 885 MW kudu power plant, to be based in Oranjemund, will be in a position to export electricity to Zambia and South Africa. He added that BW Offshore, which will take up the 31 percent equity vacated by Tullow, as well as finance the 25 percent left vacant by CIECO’s departure from the project, has been selected as the project’s preferred technical operator.
Namcor will cover the remaining 44 percent through funding from government as outlined in the detailed support package.
Namcor’s incoming MD Mulunga said that as Cabinet has provided the corporation with the mandate to develop the project, it is only Cabinet that can call it off. “We believe the project is viable even if it is difficult for government to provide funding. There are people with an appetite to invest in Kudu. Investment in this project is very important for the economic future of Namibia,” said Mulunga.
Furthermore, he noted that the finalisation of the Gas Sales Agreement is at an advanced stage, as major elements were agreed between downstream and upstream divisions prior to Tullow’s departure.