Namibian power utility NamPower has secured over $120 million in financing for the 40 MW Otjikoto Biomass Power Station. The power generation station, located near the town of Tsumeb, is set to begin construction and be operational by 2027.
On May 24, NamPower signed several agreements for the project’s implementation including a loan agreement; an engineering, procurement and construction (EPC) contract; and a wood chip fuel supply agreement, among other key documents.
“This project will be one of the answers to the long-awaited realization of a baseload power station in Namibia,” stated NamPower Managing Director Simson Kahenge Haulofu.
The Namibian Government has allocated approximately $21 million in financing for the project, with additional funding facilitated by the French Development Agency, which has extended a loan of over $100 million.
Further financial support includes a $27-million grant from climate finance institution the Mitigation Action Facility and a $3.2-million contribution from the French Fund for Global Environment for environmental research.
Poised to reduce Namibia’s reliance on imported electricity, the power station will enable a cost-effective supply of baseload power while contributing to the expansion of the country’s power generation efforts.
The project is also anticipated to curb greenhouse gas emissions through the integration of intermittent renewable energy sources such as wind and solar, thereby enhancing energy resilience while aligning with the nation’s renewable energy policies. What’s more, the project aims to tackle Namibia’s bush encroachment challenge, which impacts over 260,000 km2 of farmland and results in substantial economic losses for the country.
“Effective countermeasures through sustainable bush thinning programs can help preserve biodiversity, restore savannahs and create massive economic opportunities,” Haulofu added.
Poised to serve as the largest biomass power station in Namibia, the project will generate electricity through the combustion of wood chips sourced from encroacher bush in areas surrounding the facility.
Expected to result in approximately $1.1 billion in economic benefits, the power station will be developed as an EPC project and will be owned and operated by NamPower. Chinese power station contractor Dong Fang Electric International Corporation has been selected to implement the project.
