Decades of loan settlements ahead to strengthen power grid
The recent announcement from the national power supply utility NamPower regarding loans for the strengthening of the power grid from the World Bank and the Green Climate Fund (GCF) signifies decades of debt settlement for Namibia's future.
NamPower announced on 6 May that the first World Bank financing for its transmission expansion and energy storage project, valued at approximately N$2.6 billion, has been approved. Upon inquiry, Oarabile Minky Moilwa, responsible for external affairs for the World Bank Group for Eastern and Southern Africa, elaborated on the details of the loans in question.
According to Moilwa, funding for the entire project entails grants totaling US$18.5 million from the World Bank and the GCF, a US$100 million loan from the World Bank, and a US$20 million loan from the GCF.
Interest rates applicable to the loans depend on exchange rates and the cost of financing. As of 8 May, the interest rate was 5.39% for the exchange rate cost plus 1.05% for the cost of financing applicable to the World Bank, while the GCF loan incurs an annual fee of 0.25% for service delivery, she said.
"The World Bank loan has a final maturity date of 15 years, including a grace period of five years. The GCF loan has a final maturity date of 40 years, including a grace period of 10 years," she said.
Investment support
According to Moilwa, the World Bank supports the government's policy. "Specifically, the loans support investments to improve the reliability of the country's transmission network and to enable increased integration of renewable energy into the country's electricity system," she said.
Moilwa said it is an investment loan that focuses on the development of the second Auas-Kokerboom transmission line, the development of a utility-scale battery energy storage system (BESS), and technical assistance activities. "There are no policy conditions. Our focus is always on promoting positive outcomes for the country and its people," a World Bank spokesperson said.
Expansion
NamPower explained that the energy storage part of the project includes a 45 MW/90 MWh BESS at the Lithops substation in the Erongo Region, due to the proximity of large mining projects and the expectation of large solar power plants in the area. The reinforced power grid will also improve Namibia's ability to transmit electricity through the Southern African Power Pool (SAPP).
By enabling the integration of renewable energy into Namibia's electricity system, the project supports the expansion of electricity supply at the lowest possible cost in Namibia.
“As such, this project contributes to reducing electricity costs in Namibia and facilitates the provision of affordable, reliable, and clean energy to all Namibians," Moilwa said.
NamPower announced on 6 May that the first World Bank financing for its transmission expansion and energy storage project, valued at approximately N$2.6 billion, has been approved. Upon inquiry, Oarabile Minky Moilwa, responsible for external affairs for the World Bank Group for Eastern and Southern Africa, elaborated on the details of the loans in question.
According to Moilwa, funding for the entire project entails grants totaling US$18.5 million from the World Bank and the GCF, a US$100 million loan from the World Bank, and a US$20 million loan from the GCF.
Interest rates applicable to the loans depend on exchange rates and the cost of financing. As of 8 May, the interest rate was 5.39% for the exchange rate cost plus 1.05% for the cost of financing applicable to the World Bank, while the GCF loan incurs an annual fee of 0.25% for service delivery, she said.
"The World Bank loan has a final maturity date of 15 years, including a grace period of five years. The GCF loan has a final maturity date of 40 years, including a grace period of 10 years," she said.
Investment support
According to Moilwa, the World Bank supports the government's policy. "Specifically, the loans support investments to improve the reliability of the country's transmission network and to enable increased integration of renewable energy into the country's electricity system," she said.
Moilwa said it is an investment loan that focuses on the development of the second Auas-Kokerboom transmission line, the development of a utility-scale battery energy storage system (BESS), and technical assistance activities. "There are no policy conditions. Our focus is always on promoting positive outcomes for the country and its people," a World Bank spokesperson said.
Expansion
NamPower explained that the energy storage part of the project includes a 45 MW/90 MWh BESS at the Lithops substation in the Erongo Region, due to the proximity of large mining projects and the expectation of large solar power plants in the area. The reinforced power grid will also improve Namibia's ability to transmit electricity through the Southern African Power Pool (SAPP).
By enabling the integration of renewable energy into Namibia's electricity system, the project supports the expansion of electricity supply at the lowest possible cost in Namibia.
“As such, this project contributes to reducing electricity costs in Namibia and facilitates the provision of affordable, reliable, and clean energy to all Namibians," Moilwa said.
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