Nored gives the green light for solar plants

Nored has approved a request from three contractors to extend the deadline for constructing three 10 megawatts solar plants in Ondangwa, Katima Mulilo, and Ongwediva.

This decision will protect 1,350 jobs threatened by the non-awarding of the contracts in two years.

The independent power producers (IPPs) are Delta Energy in Ongwediva, PMP Energy Namibia in Ondangwa and (M-uuzilo/Omukwa Renewable Energy Pty Ltd) for Katima Mulilo.

The contractors accused Nored of “unprofessionalism” in a letter to Nored dated April 22, 2024.

The letter, which sought the intervention of Johannes Uushini, the chairperson of the Nored board, claimed that the projects had stalled since its approval six months ago.

“We, are compelled to escalate the expression of our deepest concerns over Nored’s prolonged inaction and lack of transparent communication regarding our second extension requests to the Nored board,” they said.

Uushini referred Confidente to Nored’s acting boss, Toivo Shovaleka, who confirmed in writing that they had agreed to the contractors’ request.

“The IPPs requested for an extension. I can confirm that Nored has fully granted their request. They are in a better space to update you on the status of the projects and the employment prospects,” said Shovaleka on Tuesday.

However, the acting CEO refused to discuss the details of the extension, saying it falls outside their purview.

“Please, rather enquire from them, as to the milestones to be achieved during the requested period. We wouldn’t want to speculate on their intentions,” he added.

Nored approved the project, spearheaded by the IPPs, in November 2022.

The envisaged construction and completion of the plants appear uncertain due to unspecified reasons, which include obtaining regulatory approvals from entities such as the national power utility NamPower and the Electricity Control Board’s go-ahead request to Minister of Mines and Energy Tom Alweendo.

“Each IPP was awarded 12,5 MWp within their respective town, namely Katima Mulilo, Ongwediva and Ondangwa. It should be noted that the tariffs offered for these projects are among the most affordable tariffs in the market.

“This provides NORED a strategic opportunity to exploit to drastically reduce its cost of sales, thereby saving millions of dollars annually.

“It should also be worth noting that Nored’s peak is during the day, offering an even stronger business case for these capital projects that will not require any capital from Nored.

“It has been several months, six months to be exact, since our initial requests were submitted in early November 2023 and the subsequent inadequate response received from Nored’s management on January 17 2024, which merely confirmed the January 17 of our request to the Nored board.

Since then, the lack of decisive communication has been profoundly troubling and reflects a disturbing level of unprofessionalism within Nored. Such an approach is hindering crucial employment for approximately 1,000 individuals and is exacerbating the power shortages that critically affect businesses and the livelihoods of the northern residents,” the dossier reads.

Meanwhile, according to the authors, one of the firms has provided a submission of the Application to Connect to the IPPs by Nored’s management.

The firms also informed Uushini that their financers have also agreed to provide funds for the construction of the plants.

“While Nored’s intention to withhold credit enhancement support for our projects is noted, we are pleased to confirm that our financiers have agreed to fund these projects, albeit under less favourable financial terms. This commitment from us as IPPs, our funders, is a testament to the viability and critical nature of our endeavours’ albeit with risk concerning payment defaults.

“The ongoing uncertainty regarding our extension requests severely impedes the progress we should be making. All three IPPs have carried out significant expenditure towards development work of these projects since signing their agreements in November 2022,” the firms added.

According to them, this includes technical studies, environmental clearance certificates, harvesting permits, lease agreements, and generation licenses.

“Once the IPPs obtain the positive extension of time, which will need to be extended due to the protracted delay in approval and receive their general licenses, construction of these three plants should commence in the fourth quarter of 2024 with commercial operation date scheduled for the same period in 2025,” the letter emphasizes.

However, it now appears that the ECB board has sought to avoid recommending their three-generation licenses to Alweendo in its new report.

“The [ECB] has resolved not to recommend the following licenses of Delta Energy, Omukwa Renewable Energy, PNP Energy Namibia and Southern Africa Renewable Energy. The board directed management to inform Nored of the principles on which the board will consider future license applications with Nored as an offtaker,” a resolution of its board meeting released in March this year indicates.

As such, Katima Mulilo, the first beneficiary of power from Zambia, caused a public outcry due to frequent blackouts. Its mayor, John Ntemwa, says the new solar plant will have a “significant” positive impact on the town’s frequency and duration of power.

“The Council’s enthusiasm for the construction of the first-ever solar-plant in our town is immense. This project is not just about energy, it’s a transformative leap towards sustainable development, resilience and self-sufficiency. You need to note that the Katima Mulilo Town Council’s (KMTC) endeavors’ in harnessing solar energy, which is a plentiful resource in our region, we are not only diversifying our energy portfolio but also setting a precedent for renewable energy sources in Namibia. This initiative underscores our commitment to innovative solutions that address our unique challenges to our town and sets a foundation for future generations to build upon,” said Ntemwa in an interview with Confidente.

In January this year, Katima Mulilo, Ngoma, and a part of Botswana, to which NamPower supplies electricity, experienced power cuts since the start of the New Year.

However, Ntemwa reiterated that such outages have in the past hindered business operations, often resulting in financial losses and reduced investor confidence. He says the new solar plant will mitigate these issues and, by so doing, create jobs and livelihoods.

“The frequency of power outages has been a significant impediment to our town’s growth and well-being. The solar-plant’s introduction is a strategic move to enhance our electrical grid reliability, thus reducing economic and social disruptions caused by power interruptions. A stable supply means our water and sewerage systems will operate uninterrupted, businesses can thrive without fear of losses due to outages, and the town’s safety is improved with continuous street lighting thereby reducing crime,” the politician emphasized.

The town, he also stressed, has availed a 20-hectare plot for the first phase of the project.

A town resident, Dibson Kwala, did not mince his words about the project, saying that despite a few delays, the benefits outweigh any concerns.

“We still have single [solar] roof-top panels owned by individuals, but we are looking at a communal pool of energy source whereby Nored in the Zambezi region is only doing electrification of homes, towns and villages, but on clean energy, they have not shown any positives in terms of investments. Zambia has been giving us energy for many years since the Kariba Dam. We have a Dam built in 1958 which has been powering southern Africa, Zimbabwe, Zambia, Botswana including Namibia. The report that we have now [indicates] that when we have a power blackout in Zambezi or Katima Mulilo is because we are connected to the Katima Mulilo-Zambia power line and not the national grid, but again, we were told that we were connected to the grid, why did they connect other towns but not our town?” Kwala sought to establish.

Meanwhile, his counterpart in Ongwediva, Taarah Shalyefu, echoed similar sentiments about the benefits of such a solar plant for inhabitants.

“Well, it is true that the Ongwediva Town Council has passed a resolution to approve Delta Energy PTY LTD, a wholly owned Namibian company to establish a PV solar-plant in Ongwediva. It is actually an achievement and we are just looking forward to having the project up and running in the town. It is an affordable form of energy because the main source of it is the sun, it is even safe because environmental pollution can be reduced to some extent, it is also a clean and pure form of energy. We can also create jobs for youth, women and even [build] capacity because through the process people will learn how to do things and many people will benefit,” said Shalyefu.