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dam-l Epupa Dam/Kudu Gas
November 28, 1997
Kudu, Epupa 'twin projects'
CHRISTOF MALETSKY
THE estimated N$4 billion Kudu power project will not be a
substitute for the construction of the controversial Epupa Hydro
electric power project, despite the fact that Kudu looks set to
triple Namibia's electricity production.
NamPower Managing Director Dr Leake Hangala said on Wednesday that
the Kudu project would provide continuous and reliable electricity
for the foreseeable future, and thus end Namibia's vulnerability
to drought and other forces beyond its control.
"It will provide a kickstart to the economy, underpinning the
transformation of Walvis Bay into a major regional manufacturing
and trade centre and breathing new life into Oranjemund, where the
power plant is likely to be built, and such other southern centres
such as Luderitz, where its electricity is likely to be employed,"
Hangala said.
He was speaking at a ceremony marking the announcement of the
development of a 750 megawatt combined cycle power plant near
Oranjemund.
The project is a joint venture between NamPower, South Africa's
power company Eskom, and Shell Exploration and Production Namibia
(SEPN).
Hangala said power from Kudu would not only guarantee security of
supply but would be a platform for the development of
energy-intensive, export-oriented industries vital to the next
phase of the country's economic development.
All this, the three partners believe, would be accomplished
without using a penny of the taxpayers' money, and with an
infusion of some N$4 billion in private investment in the country.
This, Hangala said, was "an enormous vote of domestic and
international confidence in Namibia's future".
He emphasised that no power from the project would be wasted as
any electricity surplus to the country's needs would be exported
to Eskom in South Africa on a guaranteed, long-term basis.
Yet, the project will not see Namibia abandoning of the
controversial Epupa dam project .
"Because gas and hydro power plants have very different but
potentially complementary price, reliability and other attributes,
and because a growing Namibian economy will eventually outstrip
even this (Kudu) project's output, the Kudu plant is not viewed as
a substitute for Epupa or further possible electricity projects
over the coming years," Hangala explained.
He said no utility could responsibly avoid planning for the future
decades as well as the present one, or hinge all its hopes and
responsibilities on a single source of power.
In short, Hangala said, the Kudu project would help Namibians
secure control of the country's economic destiny, a decade after
gaining control of its political destiny.
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November 28, 1997
Kudu's powerful prospects
CHRISTOF MALETSKY
IMPORTS of oil products, coal and electricity will be reduced by
around 30 per cent once the N$4 billion Kudu Gas Power Project
near Oranjemund becomes fully operational, says the Director of
Shell International Gas Ltd, Wim Hein Grasso.
Grasso said the Kudu project would also have a substantial impact
on Namibia's balance of payments through increased export
earnings.
The Namibian branch of Shell International Gas Ltd has teamed up
with NamPower and the South African electricity company Eskom to
develop what is seen as one of Africa's major energy projects.
Meanwhile UK-based electricity generating company National Power
is "firmly expected" to join the venture shortly as a fourth
strategic partner.
National Power has invested in power projects around the world,
and would bring both its know-how and its positive international
profile to the Kudu project.
"They are amongst the largest of all independent power producers
worldwide, besides having an important share of their own market
in the United Kingdom. This completes the formation of a very
powerful team, indeed," Grasso said.
However, National Power might not be the last company to join the
Kudu scheme. NamPower's Managing Director Dr Leake Hangala
revealed that the company intends to sell a portion of its share
in the Kudu project to Namibians at an appropriate stage in a bid
to promote local economic empowerment.
This would be the first time that a stake in Namibia's energy
resources have become available for ownership by its citizens.
"We will be vigilant in ensuring that this divestiture, and those
Namibians (buying into the project) meet sound financial criteria,
thus reinforcing the value that their participation will bring,"
Hangala said.
Grasso said Kudu's development would be very important for Namibia
- bringing investment, job opportunities, technology and
significant revenue to the Government. As such, it would stimulate
Namibia's economy, he said.
"The benefits will, however, not be limited to Namibia," Grasso
was quick to add. "The development and utilisation of natural gas
further south should also strengthen the economy of South Africa,
in particular the northern and western Cape provinces adjacent to
Namibia."
Eskom's Chief Executive Officer Allen Morgan concurred, saying the
partnership fitted into his company's aim to diversify its
operations and to enter into the gas field.
Technically, it is still possible to bring the first gas onshore
from the Kudu gas field in the Year 2000 or 2001. But the start of
the Kudu power station will depend on the demand for electricity
generated by the project in both Namibia and South Africa.
"With the support of all stakeholders, an early start (to power
generation) should be feasible, adding credibility to Kudu locally
and internationally," Grasso said.
However, the sale of gas from the Kudu gas field is already being
planned. Among projects interested in buying Kudu gas is South
Africa's Saldanha Steel, which is looking to develop the second
phase of its Corex plant at Saldanha Bay. The N$7 billion Corex
plant is expected to be fully operational by mid-1998, and
Saldanha Steel has indicated that it would consider the option of
using gas as the costs of shipping coal were proving to be too
expensive. Eskom is also expected to be a major buyer of gas.
If the Kudu gas field is developed as planned, gas will be piped
approximately 150 kilometres to the Namibian coast and then to
Saldanha Bay and on to Eskom's power station.
Once developed, the immediate benefits of the gas field to Namibia
will be a 12,5 per cent cut of royalties on sales, as well as
profit tax of 42 per cent, which will go into Government coffers.
The Namibian Government also hopes that gas could be a significant
source of power for the Southern African Development Community
region.
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Lori Pottinger, Director, Southern Africa Program,
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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