Namibia Power Corporation’s (NamPower) Otjikoto Biomass Power Project, set to commence construction next month, is anticipated to generate over 2,500 jobs, both direct and indirect.
Project Manager Tangeni Tshivute said the project will significantly reduce youth unemployment by creating approximately 1,000 direct jobs in harvesting and inducing 1,500 more through economic spin-offs.
He noted that job numbers could vary based on various impacts.
“During the construction phase, we expect about 300 jobs. Various factors could affect this, potentially creating 1,000 jobs through suppliers and related activities. Injecting money into the economy could induce an additional 1,500 jobs in lodges, restaurants, and other service sectors,” Tshivute explained.
This comes as NamPower has signed a loan agreement, Engineering, Procurement and Construction (EPC) contract, and woodchip fuel supply contracts for the 40MW Otjikoto Biomass Power Station.
Nampower Managing Director Kahenge Haulofu announced on Friday that the N$2.3 billion EPC contract has been awarded to Dongfang International Electrical Corporation with construction expected to take 30 months.
The power plant takeover is forecasted by the first quarter of 2027.
Haulofu noted that the project is supported by a €100 million loan from the French Development Agency and a €25 million grant from the Mitigation Action Facility for capital costs and capacity building of the local biomass value chain.
“The French Development Agency has facilitated a loan of up to €100 million for the construction and bringing into operation of the power station. The Mitigation Action Facility is providing a grant of €25 million towards capital costs and capacity building of the local biomass value chain,” he added.
Haulofu stated that the French Fund for Global Environment is contributing €3 million for environmental research and extending project benefits to vulnerable communities.
He added that the Government, through the Ministry of Finance and Public Enterprises, is contributing N$400 million.
NamPower has also signed long-term fuel supply contracts with several companies, including Sactos Investment CC, PHP Interactive Information Technology Solutions CC, Forestry Plant and Equipment Sales CC, Nexus Civils (Pty) Ltd, Africa Biomass Company (Pty) Ltd, Ultra Trading CC, Special Supermarket (Pty) Ltd, Omuriro Biomass Investments (Pty) Ltd, and Transworld Cargo (Pty) Ltd.
These contracts, amounting to a combined annual value of N$188 million, will ensure the supply of 180,000 tons of encroacher bush wood chips annually.
Meanwhile, Tshivute noted the project, featuring two 20MW grate-fired boilers, aims to produce 210-300 GWh of energy annually.
The biomass will be sourced within a 100km radius, adhering to FSC principles and using only 12.8% of the available harvesting area.
The total project budget of N$2.64 billion has been approved by the NamPower Board, with significant macroeconomic and microeconomic benefits anticipated.
According to NamPower, the net present value of these benefits totals N$16.1 billion, or N$2.67/kWh as the project develops.
The MD noted that the Project is an integral part of The National Strategy on the Sustainable Management of Bush Resources, which aims to combat bush encroachment and advocates for the restoration of savannahs through sustainable bush thinning practices.
“The project is guaranteed to make a lasting impact on the local farming and agricultural communities as Namibia is challenged by massive bush encroachment that affects over 26 million hectares of farmland, leading to billions of economic losses,” he said.
