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Namibia receives $138.5 million loan for renewable energy

19 May 2024

What is happening in Namibia?

On 6 May 2024, the World Bank approved a $138.5 million loan to help Namibia improve the reliability of the country’s transmission network and enable increased integration of renewable energy into the country’s electricity system. The project will be implemented by the national electricity utility, NamPower. 

Satu Kahkonen, World Bank Country Director for Namibia, commented: “Namibia is a uniquely positioned regional leader in the transition towards Transmission Expansion and Energy Storage Project, a greener and more sustainable future. The World Bank is delighted to support Namibia’s commitment to expand domestic energy generation with renewable solutions, consistent with the country’s Second Harambee Prosperity Plan (HPPII). This project will support NamPower (the State-owned electric power utility company) to develop future renewable energy projects.” 

The project is structured around three components: the development of the second Auas-Kokerboom transmission line, the development of a utility-scale Battery Energy Storage System facility; and technical assistance activities to support NamPower developing bankable renewable energy projects and enhance the socio-economic benefits of their projects. The project will support the development of a systematic socio-economic framework to support job creation, skills development and female employment during the design and implementation of utility-led projects. 

Although Namibia possesses excellent renewable energy resources, installed renewable capacity in the country is just over 30% of total generation. This project’s investments to strengthen the power grid are critical to enabling the integration of more variable renewable energy sources in the system. The project aims to minimise outage risks, support load growth, and unlock future opportunities for power trade in the Southern African Power Pool.

The grant funding from the International Bank for Recovery and Development (IBRD) Fund for Innovative Global Public Goods Solutions and the Green Climate Fund will be used to develop Namibia's second utility-scale battery storage facility. This will further facilitate the integration of large-scale renewable energy in Namibia’s generation mix, enabling it to reduce imports, improve grid stability, and help manage its demand peaks.

What is in it for you? 

Our readers worldwide, especially those interested in energy and environmental policies, may welcome the news, considering how Namibia is one of Sub-Saharan Africa's driest countries with plenty of renewable energy sources (primarily solar and wind).

If Namibia reaches a point where it can export to its neighbours in the future, this could also hold potential to benefit readers in other South African countries such as South Africa, Angola and Botswana. Namibia wants to position itself as a renewable energy hub in tandem with massive offshore oil and gas finds that have turned the country into a global exploration hotspot. It should be noted that the offshore drilling is mainly performed by Portuguese companies of the Galp Energia group, which holds 80% of the shares of the recently discovered PEL 83 gas field (10% held by Namibia's national oil company NAMCOR). 

The country is actively pursuing partnerships both at a regional and at an international level to further develop its energy capabilities: involved actors including the World Bank and the United Nations, as well as the European Union and the African Union.

What happens next?

Besides new solar and wind projects, Namibia is also pursuing a $10 billion green hydrogen project that will export to the European Union once completed, thanks to a Memorandum of Understanding signed in November 2022 between the Namibian government and the European Commission. In October 2023, Commission President Ursula Von der Leyen met with Namibian President Hage Geingob and agreed upon a roadmap for EU-Namibia strategic partnership, including €1 billion in investments by the EU. 

The initiatives are part of the “Global Gateway” EU strategy in Sub-Saharan Africa and the Africa-Europe Investment Package, concentrating on sustainable investments in infrastructure, health, education and skills, as well as climate change and environment, and are aligned with Namibia’s own national strategy “Vision 20230”. 

The joint support of international and regional organisations, such as the World Bank, and the European Union, will likely be crucial to allow Namibia to truly benefit from its natural resources.

The Polis Team in Milan

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