The multibillion Kudu project not viable for Namibia – experts

Oct 05, 2015

> Timo Shihepo

Windhoek – Energy experts have backed Finance Minister Calle Schlettwein in his stance against the much talked about N$14.8 billion Kudu power project against the Mines and Energy Minister Obeth Kandjoze who is pressing the government to fund the project.

The Mini st ry of Mines and Energy pinned it;s hope on the 1050 megawatt (MW) Kudu power plant project which was anticipated to help curb the predicted electricity shortages in coming years but it was halted with Schlettwein saying that it will drain government coffers.

Namibia’s power utility NamPower and partners planned to develop the massive 1.3 trillion cubic feet of Kudu Gas fields about 170 kilometres off the southern Namibian coast in the Atlantic Ocean that will include the 1050MW power station near Oranjemund.

The project was expected to come on stream in 2018 and was touted as the answer to Namibia’s power shortage, with excess power to be exported to countries like Zambia and South Africa.

But Schlettwein has opposed to the idea, arguing that the Kudu project is not affordable at this point and would put too much strain on the country’s national budget.

Prime Minister Sara Kuugongelwa-Amadhila, who is former Finance Minister herself, also hesitated to give greenlight to Ministry of Mines and Energy to pursue the power project.

Energy expert Peter Nutt of the electricity Consumer Advocacy Group (CAE) said it only makes economic sense that such a project be frozen as it will create just more problems rather than bring the country any benefits.

“The Minister of Finance consulted an independent consultancy and he was rightly informed that the implications that Kudu will have on the country is largely negative compared to the positives that it will bring.

“This is mainly because there are people whose interest is not to alleviate the electricity problems but want the project to go on so that they can benefit from the construction tenders. These are greedy people who choose to share selective information as they are not interested in the advancement of the wellbeing of the poor but rather just to increase what’s already in their pockets. Now I see some people insulting the minister (Schlettwein) who is only doing a responsible thing,” he said.

Nutt also said the country lacks the necessary skills to develop a project of such magnitude.

“We lack the construction skills to do such projects on our own and we need international companies to do it for us but that will cost us a lot of money. The situation is a little bit like the Medupi Power Station in South Africa which initially was projected to cost R32 billion but that has now increased to about R100 billion. That’s because they used local contractors whose skills are not for a project of this magnitude.”

Energy consultant, Harald Schmidt warned that if the project goes on, “a current 22 year old and his or her grandchildren will still be paying for the project”.

He said the cost of the project was exorbitant given the fact that it will be stationed about 2300 km away from the capital Windhoek, which will result in high transmission costs.

“More so for this project to happen there is need for 170 km pipe from the ocean to produce gas and there are major risks as anything can happen to this pipe. Technically and economically it will not make sense for the country to go on with this project.

“Firstly, in terms of technicalities I heard that the ocean drilling machine costs about a million a day. The tax payers will have to feel their pockets because this project is going to demand a lot of money from them,” he said.

Schmidt said people make it look like Namibia only has one option in the form of Kudu  when there are other alternatives.

“Say for example we introduce the decentralised renewable energy system whereby we encourage and invest in households to have solar panels on their rooftops and at the same time inserting this into the national grid.

“This could generate a lot of electricity which will ease the burden especially during peak hours. This will also end the monopoly that NamPower is currently having. But instead of all that NamPower has budgeted N$3billion to import electricity from other countries.

One Response

  1. I don’t understand why they can’t build several smaller power stations at areas that need or may need power in the forsesble future

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