Unpacking the Harambee Prosperity Plan – Part 11

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Harambee

Today New Era continues with our coverage of the Harambee Prosperity Plan (HPP) with a closer look at Pillar 4: Infrastructure Development. The first focal point in this pillar is Energy.

Modern, reliable infrastructure is critical for high and sustained economic growth. Without it, almost everything in the economic value chain tends to be slower, less reliable and more expensive than necessary. Namibia is fortunate to have relatively well-developed physical infrastructure, such as dams and water carriers, modern ports, a well-developed road network, electricity distribution network, and modern ICT infrastructure. In view of these, as well as Namibia’s geographic position, the government has decided to position the country as a Gateway to the Southern African Development Community [SADC].

Despite boasting such well-developed infrastructure, HPP has identified emerging weaknesses, which if not addressed with urgency, could become bottlenecks to higher growth and development during the Harambee period. These include a shortage of locally generated electricity, an ailing rail network – especially the stretch between Walvis Bay and Tsumeb – and underdeveloped water infrastructure in the north and central areas of the country.

Upgrading physical infrastructure continues to be a long-term strategic priority of government, as highlighted in NDP4. However, to upgrade all infrastructure at the same time would be very expensive and, therefore, not feasible. To that end, the Harambee Plan will address only a few critical infrastructural needs that require priority attention during the four-year period to 2020.

 Energy

Namibia’s total electricity demand is currently estimated in the region of 600 MW per annum. Due to the envisaged growth trajectory, this demand is expected to grow at about 5 percent per annum. Total generation capacity delivers approximately 400MW, thereby rendering about 200MW. It is, however, important to note that much of the generating capacity [332 MW] is linked to hydro supply from Ruacana that is dependent on the seasonal flow of the Kunene River.

The actual electricity deficit at any given point in time will, therefore, be bigger depending on the flow of the Kunene River. To close the electricity supply deficit, Namibia imports a significant amount of electricity from neighbouring countries, with the bulk coming from Eskom in South Africa. Eskom, however, has its own challenges in providing electricity. To the extent that South Africa in the year intermittently experienced load shedding in 2015. To exacerbate the situation, the entire SADC sub-region is expected to suffer from electricity deficits due to higher economic growth and aging infrastructure.

Reliance on cheaper electricity imports from neighbouring countries is, therefore, not a viable option for Namibia. Shortage of electricity will have serious negative impacts on industries in Namibia, and in turn on attraction of investment, growth and job creation. In addition to providing secure affordable electricity to industries, the government, as part of its poverty eradication strategy, remains committed to providing electricity to all educational and health facilities, and to all households, especially in rural areas. This is why the generation of electricity will enjoy top priority during the Harambee period.

The desired outcomes with regard to electricity supply during the Harambee period will be: Increase in local electricity generating capacity from 400 MW to 600 MW; provision of electricity to all schools and health facilities by 2020; and an increase in the rural electrification rate from 34 percent in 2015 to 50 percent by 2020.

The following strategies and actions will be deployed to ensure that the targets with respect to electricity supply are met during the Harambee period:

National Integrated Resource Plan [NIRP]: For a start, the White Paper on Energy and the National Integrated Resources will be finalised before June 2016. This plan will have a strong emphasis on development of independent power producers [IPP] and renewable energy solutions.

Review of the single buyer model: Government will continue to promote independent power producers in the market to ensure that NamPower does not solely carry the brunt of generation and transmission. In this connection the Ministry of Mines and Energy will before the end of December 2016 conclude the process of finalising the review of the single buyer model that will translate into secure and affordable electricity supply in Namibia.

Increase emphasis on renewable energy solutions: Namibia’s potential in renewable energy [solar and wind in particular] is immense and will, therefore, be highly prioritised during the Harambee period. This will be detailed in the White Paper on Energy [NIRP].

Other short-term generating projects: In addition to renewables, government will also promote short-term diesel generation projects at minimal costs during the Harambee period.

Rural electrification: The rural electrification drive will continue during the Harambee period. This will be done to increase the rural electrification rate from 34 percent in 2015 to 50 percent by 2020.

Schools and health facilities: During the Harambee period government will ensure that all schools and health facilities will be electrified. This together with the roll-out of broadband internet to these facilities, will open up new opportunities in e-learning, e-health, as well as e-governance.

Imports during peak demand: Not all electricity generating projects will come on stream at the same time. To ensure that there is no electricity shortage during the Harambee period, the government successfully negotiated a 300 MW standby arrangement with Eskom to cover any unforeseen electricity shortages during the Harambee period.

Demand management measures: Building new electricity capacity is time-consuming and does not address the immediate supply constraints. We will, therefore, continue addressing the demand side during the Harambee period by promoting electricity saving technologies and offering energy audits to industry and households. A detailed roll-out plan will be presented to Cabinet for approval by end of July 2016.

Long-term electricity security: Long-term generation solutions will continue to enjoy attention during the next four years for speedy implementation post-Harambee. Some of the feasibility studies that will be reviewed and concluded include the Kudu Gas-to-Power Project and the Baines hydropower project. Both these studies are expected to be concluded by March 2017.

In our next edition we will continue unpacking the Harambee Prosperity Plan by taking a closer look at Water, which is the second focal point in Pillar 4: Infrastructure Development.

 

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