Kudu Gets NO Kudos from NamPower – Alternative Energy Africa

Reports out of Nambia have the Kudu Gas-to-Power project being dropped down on the list of priority power projects that NamPower wants to spend its money on. Two years after it was announced that the long-awaited N$5 billion Kudu project at Oranjemund would be up and running by 2010, the project has gone nowhere.

The NamPower Managing Director Paulinus Shilamba said that, "The Kudu power project is a marginal and not a commercially viable stand-alone project, as it is characterized by a high US dollar-denominated gas price, meaning that the foreign exchange and hedging cost will translate into high electricity tariffs."

NamPower and Tullow Oil have been back and forth over what currency the gas is purchased in. Tullow Oil insists that NamPower must buy the gas in US dollars whereas the Namibian power utility wants to buy it with local currency since it sells its commodity in Namibia dollars. "That will translate into very high electricity tariffs. We want South Africa and Namibia to come in to reduce the cost," Shilamba said.

NamPower has already started looking at alternative power sources, including a smaller plant at Oranjemund and a gas pipeline to the Western Cape in South Africa. "Currently the project team is in the process of finalizing its investigations and preparation of detailed documents on government support required to make the project feasible," Shilamba said.

The power situation in Namibia is approaching the critical stage as south African power utility Eskom can no longer guarantee Namibia a source of power all the time.

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