IPP investment producer framework to spur power generation

> Jonas Eiseb

Windhoek – Policymakers in the energy sector are hard at work putting in place an Independent Power Producer (IPP) investment framework in place to boost electricity generation, The Southern Times has learned.

The framework is contained in a document produced by the country’s energy regulator, the Electricity Control Board (ECB) recently.

Independent Power Producers (IPPs) are by law, currently only allowed to generate electricity to sell to national power utility, the Namibia Power Corporation (NamPower), which in-turn sells to regional electricity distributors and certain municipalities.

“An Independent Power Producers Investment Framework has been developed by the Electricity Control Board to encourage IPPs participation in the industry.

“Apart from the fact that a number of licenses have been issued in accordance with the IPP Framework, the issue of risk allocation between the IPPs and the off-taker remains a stumbling block in the realization of the licensed IPPs,” the document stated.

Lack of IPPs coming into operation has perpetuated the country’s reliance on electricity imports of up to 60 percent at times.

This is a serious risk and an impediment to the achievement of the country’s developmental goals.

The ECB together with the Ministry of Mines and Energy and NamPower have also initiated a renewable energy programme with a total of 27 Independent Power Producers comprising solar, wind and biomass to submit tenders for a planned 70 megawatts of energy to be added to the energy grid, with each of the producers being limited to 5 megawatt per tender.

The drafting of the investment framework comes at a time when the ECB is mulling vast regulatory changes.

Speaking to The Southern Times recently, the board’s spokesperson Ferdinand Molale said: “The ECB is in the process of being transformed into an energy regulator, through the Namibia Energy Regulatory Authority (NERA) Bill.

“In terms of this Bill, the new regulator’s duty will be to oversee electricity, downstream gas and downstream petroleum in accordance with energy-specific legislation.”

He added that: “A major new aspect to be introduced by the Bill is the establishment of a specialised Energy Tribunal in the energy sector.

“The objective of the Energy Tribunal would be to deal with disputes and appeals lodged under the energy-specific legislation.

“The Namibia Energy Regulatory Bill is nearing completion and once finalised will be presented to the Minister of Mines and Energy for approval.”

November 2015
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