MARCH, 2019
ENERGY & SUSTAINABILITY News & Analysis
The Official Country Briefing of RDJ Consulting
This Months Issue: AFFORDABLE HOUSING A DETERMINANT OF ECONOMIC ACTIVITY BEING AN SME IN AN UNCERTAIN ECONOMIC STANCE DISASTER READINESS STRATEGY DISCLOSURES NEEDED
MARCH, 2019
2019 Internship Program The 2019 Internship Program is in full swing since 1st March 2019. Granting students and unemployed graduates real world experiences.
Watch the space for some exciting opportunities to advertise aligned with our objectives of Sustainable Resource usage is welcome.
RDJ Consulting Services CC is an advisory consultancy to the Energy, Water and Transport Sectors with a focus on sustainable operations and renewable energy.
Editor: David Jarrett RDJ Consulting Services CC Author: RDJ Consulting Interns* PO Box 23738 Windhoek, NAMIBIA Telephone: +264 61 400 171 Email: briefing@rdjconsulting.co.za Visit our website www.rdjconsulting.co.za for more information.
Brief Designed By: Gabriella C Bock.
This report is a FREE Publication and was prepared by RDJ Consulting Services CC based in Windhoek, Namibia. The content is collated from publicly available information and so its accuracy cannot be guaranteed.
MARCH, 2019
Editors Page Editor: David Jarrett RDJ Consulting Services CC Author: RDJ Consulting Interns Visit our website www.rdjconsulting.co.za for more information.
Contributing Author: Fares Shipaxu (Lead researcher & statistician) RDJ Consulting Services CC Contributing Author: Gabriella Bock (Marketing & Communication Officer) RDJ Consulting Services CC Contributing Author: Kina Indongo (Intern) RDJ Consulting Services CC Contributing Author: Selma Taapopi (Intern) RDJ Consulting Services CC
MARCH, 2019
THE ECONOMY Affordable housing a determinant of economic activity Following the unveiling of 324 residential plots in the town of Otjiwarongo, the Development Bank of Namibia's chief executive officer, Martin Inkumbi acknowledges that the Namibians government has a duty to ensure affordable housing. Housing affordability means that low-middle income individuals have the suitable access to housing at their preferable location, at a reasonable housing price. In addition to housing prices not increasing to extent that affordability is no longer possible. This is to ensure that low-middle income individuals will not end up excluded. Financial institutions, such as banks offering home loans becoming less stringent and government policies being revised constantly will ensure that these individuals, are able participants in the housing sector. Martin Inkumbi acknowledged that affordable housing “may be able to contribute to economic activities in the country” through what he terms dispersal effect. This dispersal effect ensures security of everyone’s living standard as people get to do various economic activities smoothly and effectively. Which ensures them the dignity of having a place they could call home.
From left: GIPF general manager for investments Cornville Britz, DBN chief executive officer Martin Inkumbi and the DBN's senior portfolio manager, Helen Amupolo. P
Facts
Population size: 23. Million Employment: 62.7% Literacy rate: 89.0%
GDP Growth (2018): -1.2% Repo Rate: 6.75 % Interest rate (Prime): 10.5%
Inflation (CPI): 4.40% Telecom (LTE): LTE Mobile-Cell phones: 2.575 million Subscribers
Water availability: /Capita3:8,800,000 litres/capita Electricity Gene. (Local): 484.000 MW Electricity Demand (All): 629.000 MW
MARCH, 2019
Being an SME in an uncertain economic stance Small businesses are believed to have an enormous susceptibility to economic downturns compared to bigger ones. Typically, funds directed to this sector become constrained as the tangible assets that are usually required by financial institutions as collateral appear truant when they approach them for funds to keep their business operations going or when the tangible assets, they operate from become expensive and their sales constantly decrease. This is becoming increasing apparent for Namibian business owners who, following the weak domestic economy of 2018 are struggling to recover from the ongoing recession. The effects of the country’s economic slump are being experienced by even well-established businesses in the capital. Smaller business owners facing even bleaker circumstances as many are struggling to keep their businesses open. Aggravating the situation is the decision by major businesses such as banks, law firms and insurance companies to move into the suburbs where they are closer to the people has a huge impact on small business in the Central Business District (CBD). Which has caused a decrease in foot traffic in the CBD. It is believed that the economic decline is can be attributed to declining economic activity in sectors such as agriculture and wholesale and retail trade. In a recent Economic Outlook, the Bank of Namibia (BoN) said real GDP was expected to contract by 0.2 percent in 2018, from a deeper contraction of 0.9 percent in 2017, and thereafter to recover to a positive growth rate of 1.5 percent in 2019. What this means in respects to the future of small businesses in Namibia is yet to be determined. However, it is increasing apparent that currently keeping small businesses open is proving to be a struggle.
MARCH, 2019
RENEWABLE ENERGY Muyako village residents benefit from renewable energy project Early in 2018, The Namibia Red Cross Society engaged the Spanish Red Cross to launch a renewable energy for climate change mitigation project at Muyako village. The project is now changing the lives of the residents for the better as ten economical cooking stoves and a water pump have been brought to the community. Acknowledging to this milestone is the residents who said they no longer need to collect firewood as often as they did before
MARCH, 2019
URANIUM The uranium sector looks prosperous Fitch Solutions Group, Inc. anticipates a 50 percent surge yearon-year in 2019 in the domestic Uranium production. This is said in its latest Africa Monitor report for southern Africa Amidst worries by the Mineworkers Union of Namibia[1] for the sale of Rossing Uranium shares to the China National Uranium Corporation, the company announced a 17 percent increase in uranium production for the 2018 (2479 tonnes of uranium produced in 2018 and 2110 tonnes in 2017). The increase was made possible by an elevated grades of milling, stronger demand from France. Moreover, a number of mines such as Langer Heinrich stopped producing uranium and this drove prices up by 41 percent in April quarter of 2018. Meanwhile, Marenica Energy identified highly prospective exploration targets for Uranium and only waiting to be granted with permits. Deep Yellow Limited announced on the week of 25th February, 2019 that it would resume its Reptile drilling Project. However, a concept study that was carried out between September 2018 and February 2019 by Langer Heinrich concluded that opening the mine for production will require US$100 million (equivalent to NAD1, 438 billion):this amount comprises repairing and improving (NAD 345 million), tailing facility construction (NAD 57 million), back-end upgrade (NAD 316 million) and operating capital (NAD 717 million)
MARCH, 2019
OIL & GAS Disaster readiness strategy disclosures needed When a firm has an environment disclosure in place it becomes easier for it to have a long run environmental regulation discourse. This means that it will be unlikely for it to have an incident that would affect the environment. However, this seems to not have been the case for Namibia diaries which on 03 February, 2019 had an oil spill of 2040 litres and it is alleged that it did not have an environmental risk management strategy set in place. Considering the kind of business operations the latter runs, it should have been assessing its environmental performance through its operations and hence prompt them to have some sort of “disaster readiness plan disclosures.” Making water that may have been prune to oil spill potable for human consumption requires chemicals, monitoring expertise, technical expertise, material to minimise the extent to which such incident might lead or flow to and disposing. When this happens like it has with Namibia Dairies where water from the two reclamation plants which constitute a quarter of the city’s water supply, the polluter would be expected to carry the burden of the costs involved. Hence, to clean and rehabilitate these affected plants an amount of N$32 million is anticipated to be going to be spent. Moreover, the water from one of these two plants was announced to still not be ready for consumption
Facts March 2019 Fuel Price unchanged The Ministry of Mines and Energy has decided to keep the fuel pump prices for Walvis Bay and countrywide for the month of March unchanged. The prices remain unchanged as follows: Petrol (95 Octane) - N$12.05 /L Diesel (500PPM) – 13.08 /L Diesel (50ppm) - N$13.13 /L
MARCH, 2019
WATER Rainy season, clean water provision: The hoping and the hopeless Drought and dry spells are the scenarios right on top of the farmers, agriculturalists, citizens, governments’ list of concerns when rain take long to come. Irrigation of plants, ploughing of fields, animals feeding by means of grass, unlimited and uninterrupted water supplies are affected heavily when there is no rain. For residents of Zambezi region this may not be the case anymore at least until the week that ended 16 February, 2019. The Meteorological Services of Namibia said 48.8 millimetres was recorded at Mpacha Airport alone on 14 February, 2019. Despite this, the Zambezi River had been rising slowly and on 18 February, 2019, the water levels stood at 1.63 metre compared to 4.09 m on the same date last year In addition, the rain received in the southern part of the country made farmers happy when some of recorded between 117-165 millimeters in only two days and residents of Epukiro in the Omaheke region have been reported to be happy with the rain they received. Meanwhile, communities in oshikoto such as Omutele are reported to be hopeless as their water demands needs surpassed the supply affecting everyone and their animals which now have grassless grazing areas. The residents have hopes that the bulk water project that ended up a wild dream in 2017 because of funds depletion would be looked at again. Naturally, rivers are meant to never run out of water this is reported to, however, not be case anymore for Orange River. The river is reportedly running dry. Notwithstanding the dire situation the latter community faces, Iitapa-Okeeholongo in the omusati region were in awe of the water pipeline they had received on 08 February, 2019
MARCH, 2019
Namibia current dam levels
The figure above indicates that Goreangab dam has the highest volume with 100.2 percent of full capacity. This represents a 0.3 percent decrease of the 100.5 recorded on the same week in the previous season. Naute dam in the south recorded the highest volume with 97.8 percent of full capacity representing a 27.7 percent increase of the 70.6 percent contained the same time last season. Otjivero Silt, Bondels, Omaruru, and Omatjene Dams recorded the lowest percentages of full capacity by volume with all recording 0.0 percent. Von Banch was 46.3 percent full of full capacity. This was due to the transfers of water it received from Swakopoort and Omatako. It, however, decreased: by 0.3 percent of the volume recorded in the preceding week and 5.6 recorded on the same week last season. Swokopport lost: 0.6 percent volume of the 17.8 percent of full capacity it had received in the week before and 20.2 percent of the 37.4 percent it recorded on the same week last season.
MARCH, 2019
ELECTRICITY Africa Energy Indaba 2019 The 2019 Africa Energy Indaba was held on 18-21 February in Johannesburg. It was opened officially by Minister of Energy Honourable Jeff Radebe and held under the theme “Attracting Investment into the African Energy Sector”. At South Africa level, the minister called for technological innovation to be able to exploit the coal the country has. An innovation in technology entails things such as “Carbon capture and storage, underground coal gasification, coal to liquids. At continental juncture, he acknowledged the high cost of energy, regulatory, financial, administrative, and investment barriers to be the risks the continent is facing. He hinted that having reliable, resources guaranteed for the long run, competitive and secure electricity sector is a needed pull factor for investor in Africa. Moreover, the continent has to recognise that energy efficiency and demand side management (or EEDSM) are needed in energy planning.
Namibians will continue having electricity On 18/02/2019 NamPower announced that the country will continue having electricity amidst what happens in neighbouring South Africa’s energy provider, Eskom which had a week of load shedding crisis from the 11th of February 2019. This came as a result of the latter that keeps running out of finances. However, the Managing Director of NamPower said that this was not going to have a similar impact on Namibia as despite the hourly 200MW of electricity it demands from Eskom, they optimise their demand in trading agreements Eskom has with the Southern African Power Pool (SAPP) partners as well. Moreover, the MD hinted that two of the local plants were at that time dispatched at an optimum level as contingency for load shedding. Nonetheless, Tito Mboweni state financier of South Africa stated that Eskom issues were salvaged by the bail out of U.S. $4,9 billion (ZAR 69 billion) that will be allocated
MARCH, 2019
FINANCE Diversifying renewable energy financing Namibia has taken commendable steps on introducing renewable energy policy and one of the financing mechanisms options to bridge the financing gap is issuance of green bonds. in green bond financing the “the issuer commits to the use of bond proceeds only to environmentally-friendly products.� the competitiveness of the green bond is the feature that it is promoted to investors as green with assurance that the revenues are strictly for green projects
This has appeared to be a possible mechanism and has gained momentum over the years Africa is marginally represented. This marginal figure is likely to have changed now that we have local banks such Bank Windhoek which, in 2018 issued a green bond and was recently awarded with the Green Bond Pioneer Award by Climate Bonds Initiative at the 4th Annual Green Bond Pioneer Awards (GBPA)and bridge the financing gap in Namibia.
Investment needed for infrastructure revamp BILLION-DOLLAR investments are required to restructure infrastructure in areas that are inadequately served with energy, and to reinforce existing infrastructure to unlock development opportunities regionally, mines deputy minister Kornelia Shilunga says. She made these remarks on Wednesday at the opening of the 52nd Southern African Power Pool (SAPP) meetings being held in Windhoek this week. The infrastructure upgrade is needed because there is also concern that there are sections of the interconnected grid that suffer from congestion due to constrained infrastructure.
MARCH, 2019
A single buyer model in an advancing energy sector seems uncompetitive The popularity of a Single Buyer Model in Utility was felt in the developing countries over two decades ago in Middle-East, southern Africa, and Southeast Asia. Over 17 years ago the Namibia government gave a go ahead of a model to restructure supply of electricity; this entailed a single Buyer Model with NamPower as entrenched body. The model was deemed appropriate in managing and administering electricity related trading and any electricity generation financing opportunities. However, the government has outlined that the long run energy needs in the wake of new technologies may not be possible unless the Single Buyer Model was modified to, allow for two party energy trading; REDs and large customers would be able get energy supplies directly from the other energy generators (IPPs). Moreover, competition will be encouraged and customers will have a wide range of energy suppliers to choose from, compared to the incumbent who has no comprehensively integrated market price and small customers hence become excluded as they only wait distributors such as REDS to first sign electricity contracts.
Renewable Energy Feed-In Tariffs (REFITAS) independent power producers (IPPs) valued by NamPower The 18 Power Purchase Agreements (PPAs) established by the national power utility NamPower giving it an expectation of 171MW of installed capacity, makes it anticipate that the 14 Renewable Energy Feed-In Tariffs independent power producers (IPPs) will invest over a billion Namibia dollars in the electricity sector, this will be realised through both domestic and foreign direct investment. This will mean that the 70 MW of the 171MW is anticipated for this review period and will be added by the IPPs with over two-thirds (45 MW) of electricity already produced by half of the IPPS and the remaining (126 MW) will be added by the other half of the IPPs in the next period.
MARCH, 2019
ENVIRONMENT AND SUSTAINABILITY Namibia to embrace Marine Pollution Treaty It was reported and confirmed by the Minister of ICT that Namibia will be signing up for two treaties under the international convention, which are both aimed at preventing and responding to sea and air pollution from sea-going vessels. So far, Cabinet has already approved Namibia's accession to two optional annexes of the International Convention for the Prevention of Pollution from Ships of 1973, also known as the Marine Pollution Convention (Marpol). In support of the treaty, The deputy director responsible for marine pollution control at the Ministry of Works said that Namibia's accession to this convention will strengthen the country's marine pollution preparedness and response system “in the sense that should a significant incident occur, we don't have to use a lot of money to respond to that incident�.
EIF Secures N$127 million for climate change projects The ENVIRONMENTAL INVESTMENT FUND EIF is improving the community adaptive capacities by enhancing the resilience of natural resources and livelihoods which are sensitive to climate change. Additionally, plans to maintain and enhance ecosystem integrity are being put in place; these plans will ensure continuous support to the generation of food and income to reduce the severity of negative socio economic impacts of climate change on vulnerable rural households. These are the Central Northern, Lower Eastern, Kavango West and East, Kunene North, Kunene South and Daures, Southern, Zambezi East and Zambezi West and Kyaramacan landscapes. This was made possible by the Green Climate Fund and the funds will be availed for a period of five years.
MARCH, 2019
TELECOMMUNICATIONS
Utilities in telecommunications The National Power Utility, NamPower, has introduced a new fibre optics network which is branded "The Grid Online". The new network is believed to offer the highest capacity of any network connection. This is seen as the future of digital communication, chairperson of NamPower’s board Kauna Ndilula said that the move is an incentive to the already established and licensed telecommunication services and wholesalers. The connection covers Windhoek and Swakopmund.
MARCH, 2019
ROADS AND TRANSPORT
Roads infrastructure too big to fail? The functionality of the economy or its recovery is ensured when the states of the infrastructures such as roads are maintained. For example, commerce requires well-maintained roads as of the infrastructures to get manufacturers acquire materials or parts that are in their raw forms, and in turn get the finished products to consumers. Thus, unplanned expenditures when the state of these necessary infrastructure deteriorates should be expected at all times. The Namibia’s Roads Authority is reported to have approached the government for funding of the roads infrastructure projects and it requires 1, 3 billion to keep the projects going but most of it is going to have to go those who have been making the projects possible.
MARCH, 2019
CAREERS
A warm welcome to our 2019 interns Olivia-Joan De Celestino- Marketing & Communications Intern IUM Johannes Sakaria- Statistics Intern NUST Peter N. Haufiku- Statistics Intern UNAM Selma Taapopi- Marketing & Communications Intern College of the Arts Kina Indongo- Marketing & Communications Intern UNAM Eunice Ileka- Marketing & Communications Intern NUST
MARCH, 2019
TENDERS NamPower Request for Quotations for Provision for transport services to Lesotho for IPG 2019Request for Van Eck Coal Survey – Land Surveyor Request for Quotations for Provision for transport services to Lesotho for IPG 2019Request for Van Eck Coal Survey – Densities and Moisture Analysis Request for quotation for Additional Refurbishment of specified areas and elements on the 7th floor, NamPower Centre Request for Quotations for Provision for transport services to Lesotho for IPG 2019
MARCH, 2019
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