N$4bn approved for Baynes power link

Government has formally approved a N$4 billion financing arrangement for the Angola-Namibia Transmission Interconnector (ANNA) Project, a cross-border power initiative linked to the proposed Baynes hydropower development and expected to strengthen electricity trade between the two countries.

Finance Minister Ericah Shafudah confirmed the approval in a letter dated 25 August 2026 to Mines and Energy Minister Modestus Amutse, seen by Namibian Sun.

The arrangement includes N$1.1 billion advanced by NamPower and a further N$700 million committed through the National Energy Fund (NEF). Of the NEF commitment, N$350 million is to be made available during the 2026/27 financial year, with the remaining N$350 million scheduled for 2027/28.

The remaining N$2.3 billion is expected to be financed through the NEF's Strategic Fuel Storage Levy of 28 cents per litre.

Shafudah said the funding mechanism was consistent with the financing framework approved by Cabinet.

“We have now noted the additional new information provided in your latest correspondence, which indicates that the N$2,3 billion shortfall is intended to be financed through the existing NEF strategic fuel storage levy of 28 cents per litre, in accordance with the financing framework approved by Cabinet,” she said.

Shafudah also said assurances had been provided that the financing arrangement would be structured within the applicable electricity tariff framework to prevent the project from placing an undue financial burden on electricity consumers.

“In light of the additional information and clarification provided, I hereby grant concurrence, in terms of section 11 (2) (e) of the Petroleum Products and Energy Act, 1990, for the proposed financing arrangement and the execution of the NEF Loan Agreement with NamPower for the ANNA Project,” she said.

The approval follows an earlier funding shortfall identified by Amutse.

“The remaining N$2,3 billion of the approved N$4 billion project funding is currently under negotiation. The ministry will revert to the Ministry of Finance once the relevant financing arrangements and loan agreement have been finalised,” Amutse had stated.

Cross-border power link

Cabinet approved the ANNA Project in February as a strategic cross-border electricity initiative aimed at strengthening energy security and electricity trade between Namibia and Angola.

The project entails the construction of a 166-kilometre, 400 kV transmission line linking the Kunene substation in Namibia to the Cahama substation in Angola. About 30 kilometres of the line will be located within Namibia.

The project will also include a 270-kilometre transmission line connecting the Omatando and Otjikoto substations.

NamPower and Angola's Rede Nacional de Transporte de Electricidade (RNT) signed a power purchase agreement and joint development agreement in April.

Amutse said the project would expand electrification in Angola's Huíla and Cunene provinces, including supplying Xangongo and reinforcing the Ondjiva power system.

For Angola, the project is expected to create an avenue to export surplus electricity, particularly from its hydroelectric generation capacity, while potentially allowing the country to earn additional revenue from regional power exports.

Namibia is expected to benefit from a more stable electricity supply as demand continues to grow, while reducing dependence on costly electricity imports and diversifying its power sources.

The project could also facilitate Angola's participation in the Southern African Power Pool, which enables member countries to trade electricity and share generation and transmission resources.

The project is scheduled for completion in 2029.

A groundbreaking ceremony had been planned for June, with officials from both countries expected to attend, but it remains unclear when the ceremony will now take place.