NamPower is set to begin construction of a N$1.259 billion 50megawatt (MW) Anixas II Power Station in Walvis Bay after signing an engineering, procurement and construction (EPC) contract with FK Namibia Joint Venture (JV) on Friday.
The JV is made up of Israeli company, FK Generators & Equipment Limited as the lead member, partnering Namibian companies, August Twenty-six Construction and Phim Investments CC.
The proposed Power Station is due to be completed in December 2023, with construction expected to start in May 2022 and will be funded, constructed, owned, and operated by NamPower.
The power plant will make use of Internal Combustion Reciprocating Engine (ICRE) technology, using heavy fuel oil (HFO) and will also be possible to operate using either diesel, liquefied or compressed natural gas (LNG or CNG).
“NamPower is committed to supporting and achieving the government objectives as set-out in the national planning policies, and in particular the National Integrated Resource Plan (NIRP) and the 5th National Development Plan (NDP5),” the power utility said.
“The Anixas II Power Station will be developed to increase the generation capacity of NamPower as well as provide backup power to stabilise the grid due to the intermittency of Renewable Energy sources.”
NamPower owns and operates Anixas I and two other power stations, with the combined installed capacity of 459.5 MW, with these stations being the main sources of local power generation capacity in Namibia.
The signing of the Anixas II Power Station agreement comes after NamPower anounced last month that it had invested N$50 million in two mobile substations, which it expects to take delivery mid-2022.
The mobile substations will also be used to facilitate an alternative temporary power supply where new installations, maintenance or upgrading must be conducted.
The latest announcement comes as rating agency Fitch has forecasted NamPower’s CAPEX to increase to about N$1.5 billion in FY22 and N$3 billion in FY23 and FY24, from less than N$500 million averaged over the last four years.
NamPower is currently undertaking five power generation projects and 11 transmission projects aimed at reducing its reliance on imported electricity, the majority of which will be funded through NamPower’s substantial cash and liquid assets.
NamPower at the end of June 2021 had N$3.8 billion cash in the bank and N$2.6 billion invested in money market accounts.
Fitch expects the projects to also increase the power utility’s operating costs in the medium term by about N$300 million on average.
