The RDJ briefing 2017 08 16 by RDJ Briefing

Energy & Sustainability News & Analysis

August 2017

Namibia

Country Briefing

Country Brief – NAMIBIA

August 2017

Quick Facts Population size Employment Literacy

2.30 million 66.00% 89.00%

GDP Growth 2016 0.20% Repo Rate 7.00% NCPI (Apr 2017) 6.10% Interest rate (Prime) 10.75% Inflation rate 5.40 Budget (Current) N$62.54 Billion

Geographic size 824,292 km²

Free vector map of Namibia outline - by One Stop Map

Industries Telecom (sophistication) Mobile - cell phones

Tourism, Mining, Fishing LTE 2.575 million subscribers

Water Availability / capita1 8, 800, 000Litres/capita 484.000 MW 629.000 MW

2005 Figures https://www.greenfacts.org/en/water-resources/figtableboxes/aquastat123.htm

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Electricity Gen. (Local) Electricity Demand (all)

Country Brief – NAMIBIA

August 2017

Table of Contents Economic growth at a glance ................................................................................................................ 4 Oil & Gas ............................................................................................................................................... 5 Electricity .............................................................................................................................................. 6 Renewable Energy .............................................................................................................................. 10 Water .................................................................................................................................................. 12 The Environment ................................................................................................................................ 13 Roads and Transport ........................................................................................................................... 13 Financing ............................................................................................................................................. 14 Tenders ............................................................................................................................................... 16 Careers ................................................................................................................................................ 18

This report is a FREE Publication and was prepared by RDJ Consulting Services CC based in Windhoek, Namibia. Its content is collated from publicly available information and so its accuracy cannot be guaranteed. Advertising aligned with our objectives of Sustainable Resource usage are welcome. Contact Details; RDJ Consulting Services CC PO Box 23738 Windhoek, NAMIBIA Telephone: +264 61 400 171 Email – Office@rdjconsulting.co.za

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Visit our website www.rdjconsulting.co.za for more information.

RDJ Consulting Services CC is an advisory consultancy to the Energy, Water and Transport Sectors with a focus on sustainable operations and renewable energy.

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Country Brief – NAMIBIA

August 2017

Economic growth at a glance

Figure 1Bank of Namibia ECONOMIC OUTLOOK – July 2017

Projections

Figure 2 Bank of Namibia ECONOMIC OUTLOOK – July 2017

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Growth in the electricity and water sector is expected to remain strong during 2017 and 2018. The electricity and water sector is projected to expand by 9.1 percent in 2017, which is an improvement from the 4.4 percent registered in 2016, before slowing to 4.0 percent in 2018.

Country Brief – NAMIBIA

August 2017

Oil & Gas Windfire acquires licence block in Namibia2 Canadian oil and gas3 explorer Windfire4 in July 2017, acquired a 91.5% stake in Riviera Mina, licence holders of petroleum blocks numbered 2815 and 2915. Riviera in turn, holds 76.5% in the two blocks. The remaining interest in the licence is held by the National Petroleum Corporation of Namibia (NAMCOR) and local Namibian partners. Local partner King Indongo and proposed director of Windfire said the transaction was another major investment in the oil and gas sector. The licence is a strategically located off-shore petroleum exploration block with extensive technical studies already concluded, including 1137 square kilometres of third dimension seismic covering a significant prospective resource, that offers a drill-ready, multiple zone, oil and gas target in the Orange Basin. The remaining stake in the oil block is owned by the Namibia Petroleum Corporation.

India joins the Namibian oil rush The Indian government-owned Oil and Natural Gas Corp (ONGC), ONGC Videsh Ltd (OVL), has acquired a 30% interest in an oil block off the coast of Namibia, from Tullow Oil. OVL said that it has “signed definitive binding agreements with Tullow Namibia Ltd (Tullow), a wholly owned subsidiary of Tullow Oil plc, on 28 June, for acquiring a 30% participating interest in Namibia PEL 37, for blocks 2112A, 2012B and 2113B, out of Tullow’s existing participating interest of 65 % in the licence”. Tullow continues to remain the operator after the acquisition.

Liquid Fuels

The Ministry of Mines and Energy announced that that the prices of petrol and diesel pumps for August remained unchanged5: Petrol (95 Octane) - N$ 10.50 /L Diesel (500 PPM) - N$ 10.33 / L Diesel (50 PPM) - N$ 10.38 / L Namibia has no refinery capacity to-date

http://www.namibian.com.na/57240/read/Windfire-agrees-to-acquire-oil-blocks-in-Namibia http://www.marketwired.com/press-release/windfire-signs-agreement-to-acquire-off-shore-oil-blocks-innamibia-tsx-venture-wif.h-2227389.htm 4 https://www.namibiansun.com/news/windfire-acquires-licence-block/ 5 http://www.namibian.com.na/57465/read/No-fuel-increase-in-August

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Country Brief – NAMIBIA

August 2017

Electricity NSA 2011 Population and Housing Census reports that 71% of Namibians living in urban areas had access to electricity by 2011, while merely 19% of rural communities had access to electricity. This means that nationally, only 45% of people have access to electricity.

Erongo electricity up by 8 percent6 Erongo RED CEO Fessor Mbango announced on June 28 that ERONGO's electricity consumers will see an 8% average increase in their electricity bills as from August. He also said that the reason for the increase is to ensure cost-reflectivity, and also to recoup N$28 million for the envisaged Swakopmund bulk upgrade. “Despite the increase by NamPower, the actual impact to Erongo RED is 10,6%. Earlier in July, the Electricity Control Board awarded Erongo RED an 8% average weighted tariff increase,” Mbango said, explaining that the 8% increase is the average of different tariff categories applied to different groups of consumers in the region. This means that the actual impact on consumers will vary between 6% and 13%, depending on the size of connection and consumption of individual consumers. He said when Erongo RED was determining tariffs, it looked at various factors, such as the impact of the 10,6% increase by NamPower, the impact on end-users, envisaged capital projects, electrification projects, the replacement of some of the inherited and ageing infrastructure, and the servicing of loans. “We also took into account the socio-economic challenges of our customers, including the impact of electricity costs on our commercial and industrial customers. We have looked into all possible ways to ensure that we cushion the impact of tariff increases to the customers, at the same time ensuring the company continues to operate sustainably,” he said.

Namibian government introduces electricity support7 tariff8 Developed by the Ministry of Mines and Energy (MME) and the Electricity Control Board (ECB), and approved by Cabinet, the National Electricity Support Tariff (NEST) pilot project was launched in Oshakati by the Oshakati Premier Electric (OPE), which is the local implementing agent. The NEST pilot project is aimed at connecting low-income household’s customers that are willing to convert to a 15 amperes low-capacity prepaid connection in order to make electricity more affordable for them. Visit www.nest.org.na

http://www.namibian.com.na/57464/read/Erongo-electricity-up-by-8-percent http://www.ope.com.na/Lists/News/News.aspx?ID=7 8 https://www.esi-africa.com/news/namibian-electricity-support-tariff/ 7

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Having its first phase piloted through the OPE on 1 August, the project is expected to enable the MME and the ECB to validate the benefits before the project is rolled out nationally in 2018.

Country Brief – NAMIBIA

August 2017

Approved Electricity Tariffs (2017) Area Provider CENORED City of Windhoek Erongo RED

Keetmanshoop Mariental Nampower NamPower Transmission NamPower TOU NORED OPE Regenstein SunGate

Tariff Schedule (Web Link) http://www.ecb.org.na/images/docs/Tariffs/2018/CENORED_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/COW_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/Erongo_RED_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/Keetmanshoop_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/Mariental_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/NamPower_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/NamPower_Transmission_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/NP_TOU_TARIFFS_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/Nored_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/OPE_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/Regenstein_2017.pdf http://www.ecb.org.na/images/docs/Tariffs/2018/SunGate_2017.pdf

Net Metering

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The original table can be found at http://www.ecb.org.na//images/docs/Tariffs/documents/Net_Metering_Avoided_Cost_1617.pdf

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Country Brief â&#x20AC;&#x201C; NAMIBIA

August 2017

Generation

Current Operational Generation:

Installed Capacity Current Operational Generation: Plant Name

Installed Capacity

Ruacana

347 MW

Van Eck

120 MW

Paratus

24 MW

Anixas

Anixas 4%

5 MW

Otjiwarongo

5 MW

Grootfontein

5 MW

Karibib

5 MW

Karibib 1%

Grootfontein 1%

Osona 1%

Van Eck 22%

4.5 MW

Osona

Otjiwarongo 1%

Paratus 4%

22.5 MW

Omburu

Omburu 1%

Ruacana 65%

Generation Imports

200 MW

80 MW

39 MW

Ministerial budget allocation 2017 / 2018

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Apart from the above shown imports, Namibia is looking for additional Megawatts (MW) to be sought from Zimbabwe to meet more of its energy demands. The outlook is for an additional 50 MW added to the current 80 MW. This is a move which will further the utilisation of N$ 50 million9 of subsidisation received by NamPower towards meeting energy import costs.

Country Brief – NAMIBIA

August 2017

Power Generation Surplus for SADC Southern African Development Community (SADC) secretariat representative, Mapolao Rosemary Mokoena said on the 2nd of August that member states have exceeded10 their 2004 target of generating 3 757 megawatts (MW) of energy by 2016. This has caused the generation capacity to exceed by 919 MW, since the beginning of the 2017. Total installed capacity for all SADC member states is more than 60 670 MW. The excess is not due to a slowdown in the South African economy due to a fall in mining and manufacturing production, and also the impact of a coordinated approach in implementation of the SADC energy programme. Namibia’s contribution to this included 5.28 MW generated by the Karibib solar power plant and 4.5 MW generated by the Omburu solar power plant at Omaruru, which feeds the national grid.

http://www.lelamobile.com/content/69170/Southern-Africa-exceeds-energy-generation-target/

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Figure 3 http://www.sapp.co.zw/

Country Brief – NAMIBIA

August 2017

Renewable Energy

Funds awarded to promote Renewable Energy11 The European Union (EU) has awarded N$7 million to the Namibia Red Cross Society (NRCS) on 12 July to promote renewable energy in Namibia. The NRCS, in partnership with the Spanish Red Cross, will implement the project titled 'Promoting Renewable Energy for Climate Change Mitigation Initiatives in Namibia'. According to NRCS Secretary-General Naemi Heita, this project aims to mitigate the negative impacts of climate change within rural vulnerable communities in Namibia, by promoting the use of renewable forms of energy and energy efficient technologies. The project will facilitate the distribution of solar lamps to 200 households, construct 200 improved biomass cooking stoves, and install 10 energy efficient on-farm irrigation water pumps in 10 selected communities in the Kavango East, Kavango West and Zambezi regions.

Switching Green schemes to solar energy12 AgriBusDev managing director Petrus Uugwanga, who oversees the green scheme operations, reported that government green schemes will soon do away with NORED’s high energy tariffs, as they plan to install solar power at all irrigation projects. The idea was first mooted by Minister of Agriculture, Water and Forestry, who directed AgriBusDev during a visit to the government-owned Shadi Irrigation Project in Mukwe Constituency in Kavango East in June 2016. Uugwanga also said that they are gravitating towards the use of solar power at all green schemes and that a tender will soon be floated for the installation of solar panels.

UN House goes solar13

https://www.namibiansun.com/news/eu-gives-n7m-for-promotion-of-renewable-energy/ https://www.newera.com.na/2017/07/31/green-schemes-to-switch-to-solar-energy/ 13 https://www.newera.com.na/2017/07/28/un-house-goes-solar-reduces-power-consumption-by-half/ 12

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The recently agreed Sustainable Development Agenda identifies clean energy as an integral part of the global strategy to end poverty, protect the planet, and ensure prosperity for all. Specifically, Goal 13 of the 17 SDGs (Sustainable Development Goals) speaks to climate change, while Goal 7, aims to ensure access to affordable, reliable, sustainable and modern energy for all.

Country Brief – NAMIBIA

August 2017

Deputy Minister of Mines and Energy Kornelia Shilunga officially launched the United Nations (UN) House in Klein Windhoek solar panels in July 26, alongside leaders of the City of Windhoek (CoW) and the UN in Namibia. The UN House installed 400 individual solar panels in May, which at peak are currently generating approximately 100 kilowatts of electricity per hour. Since the installation in the beginning of May, power usage at the UN House has decreased by approximately 50 percent, which translates to savings of roughly N$60,000 per month and over time, this will result in significant monetary savings that can be directed to programmatic work as opposed to operational costs.

Ombepo wind farm completed The Ombepo wind farm being constructed by InnoSun Energy Holding, a Namibian registered company with a 70% French shareholding at Lüderitz has been completed on schedule last week14 and InnoSun plans to commission the Ombepo wind farm by the end of this August 2017. The brand-new world class wind farm will take the small harbour town into a new age of alternative energy utilisation and is a partnership between the company and the Lüderitz Town Council. Usuta Imbili, the project leader at InnoSun Energy Holding said that each turbine has a capacity of 2 MW and will have a total installed capacity of 6 MW. Imbili added that the Power Purchase Agreement (PPA) for the Ombepo wind farm was signed in 2016, under the Interim Refit Programme launched by the MME and the ECB for NamPower as an off-taker, and that production will be capped at five Mega Watt as agreed in the PPA with NamPower. The project has a PPA with NamPower as the buyer for the duration of 25 years at a tariff of N$1, 08 per kilowatt hour. According to Imbili, future wind farms are in the pipeline for the area. Construction work has already commenced on the #Oab wind farm with a capacity of 8 MW. The second wind farm will supply electricity to the Elizabeth Bay Mine under a PPA with NAMDEB.

Namibia renews commitment to renewable energy 15 During the launch of solar panels at the UN House in Windhoek in July 26, MME Minister said that Namibia has set itself a target of providing 70% of the country’s energy mix from renewable resources by the year 2020. City of Windhoek Deputy Mayor Fransina Kahungu said in the same event that the City plans to have 20 % or more of bulk electricity consumed in Windhoek, to be supplied from renewable energy sources by 2022.

http://www.informante.web.na/l%C3%BCderitz-enters-new-age.19764 http://www.observer.com.na/index.php/national/item/8479-namibia-renews-commitment-to-renewableenergy 15

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She also added that in the past, the City tried to implement proactive efforts to develop renewable energy sources, but these initiatives were hindered by the absence of a coherent and clearly pronounced policy. Therefore, a high impact strategic initiative of developing a Renewable Energy Policy for the City of Windhoek has been created. “At the moment, this policy is at an advanced stage of development and is expected to be completed and approved by the council by August 2017”.

Country Brief â&#x20AC;&#x201C; NAMIBIA

August 2017

Water

Water demand in Namibia is met via surface and artesian sources.

Water availability16 There has been more water availability in the country during the past two months, especially in the northern part of the country due to April rains and floods received. The overall Dam capacities had been recorded at 414.041 million cubic metres (Mm3) during May 2017. However, such levels have been declining since then, down to 378.158 Mm3 in July 14.

Secure water for Windhoek until 202017 A work done by a Water Technical Committee on Supply Security revealed that the water available in various reservoirs in central Namibia is enough to supply Windhoek and surrounding towns for at least two more years if used wisely. Petro Maritz, a member of the committee and water expert also told President Hage Geingob at State House on 17 July 2017 that so far, the inflow of water in the central dams during the past rainy season was assessed to be sufficient to supply Windhoek and surrounding areas up to the year 2020.

Namwater tariffs NamWater has been approved an increase of 13% in water delivery which became effective as of the 1st of June 2017.

Rand Water to equip local boreholes Some N$50 million of the N$100 million drought relief donation from South Africa will now18 be put to use at 104 boreholes in north Namibia, drilled by delegates from the Ministry of Agriculture in conjunction with other from the Prime minister's office. The South African High Commission has announced that Rand Water (South Africa's largest water utility) has been mandated for the N$50 million rehabilitation of the 104 boreholes as part of that country's N$100 million donation to Namibia in 2013.

An ancient well is bringing northern Namibia water19-20 Ohangwena II an ancient aquifer under Angolan and Namibian soil that covers a location approximately 70km by 40km on the Namibian side of the border and is 250m-350m deep. It is approximated that its kept volume in Namibia lies at 5bn cubic litres comparable to the present need in the north of the nation for 400 years.

https://www.namwater.com.na/index.php?option=com_jumi&view=application&fileid=6&Itemid=109 https://www.newera.com.na/2017/07/18/windhoek-water-secure-until-2020-expert/ 18 https://www.namibiansun.com/news/rand-water-to-equip-local-boreholes 19 https://www.theguardian.com/global-development/2017/aug/07/how-an-ancient-well-is-bringingnorthern-namibia-water-until-funds-dry-up 20 http://www.lrsuntimes.com/2017/08/08/how-an-ancient-well-is-bringing-northern-namibia-water-untilfunds-dry-up/#img%20-2

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Country Brief â&#x20AC;&#x201C; NAMIBIA

August 2017

Latest information (2017) has the available resource being quadrupled to 20bn cubic metres, and they now think the aquifer will naturally charge with surface area water from southern Angola, as long as the extraction rates stay tolerably low. With cautious husbandry, Ohangwena II might be an irreversible drinking water reserve for northern Namibia.

The Environment Second Sustainable Development Awards launched for 201721 The Environmental Investment Fund of Namibia in partnership with the Sustainable Development Advisory Committee and the Hanns Seidel Foundation Namibia Environmental Awareness and Climate Change Project officially launched the Sustainable Development Awards 2017 at a press conference on Friday, July 7th 2017. This 2nd edition of the Awards recognizes achievements of companies, local authorities, civil society organizations and individuals that have demonstrated excellence in the pursuit of sustainable and responsible development.

Sustainable development is imperative22 On the 2nd of August, Nedbank Namibia donated N$1 million to the Namibia Nature Foundation (NNF) to fund environmental projects. The projects will mostly focus on research to generate new information needed to manage the country's environment and wildlife resources sustainably. In its continuous efforts to invest in environmentally sustainable development through its Go Green Fund, the bank is currently in the process of planting 58 trees across Namibia. The tree-planting is spearheaded by the bank's staff and is part of an in-house transformational initiative to create awareness among staff to be more mindful of the environment and to be sustainable in all their efforts. The handing over of the N$1 million cheque coincided with Earth Overshoot Day celebrated on 2 August at an event held in Windhoek. Earth Overshoot Day marks humanity's failure to protect the earth's resources.

Roads and Transport Namibia Roads Authority confirms upgrade of Windhoek-Okahandja road23

http://www.eifnamibia.com/index.php/eifmedia https://www.namibiansun.com/news/sustainable-development-is-imperative/ 23 https://constructionreviewonline.com/2017/08/namibia-roads-authority-confirms-upgrade-of-windhoekokahandja-road/ 22

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The Namibia Roads Authority (RA) has confirmed US$30.5m spending on the upgrade of the Windhoek-Okahandja road dual carriageway. The project kicked off with the construction of section 3(a) of the huge project, covering the road from Brakwater to the Dobra River. The construction section started in January 2014 and was completed in December 2016.

Country Brief – NAMIBIA

August 2017

Further, Road Authority is expected to announce the cost of section 4(b) once a contractor is appointed. However, section 4(a) involves the rehabilitation and upgrading of the dual carriageway. The restoration begins from Dobra River to the Omakunde switch. Meanwhile, the project is currently at 38 %. The project is scheduled for completion in January 2019.

The upgrade continues from the Omakunde interchange all the way to Okahandja interchange. The project connects at a T-junction with roads leading to Okahandja, Swakopmund and Otjiwarongo.

Financing RMB Namibia shows appetite for energy projects24 RMB Namibia, which recently financed AEE Power Ventures’ 5 MW solar power plant, says it is eager to finance more renewable energy projects in the country. AEE Power Ventures is an international power developer focused on developing countries, with projects in Kenya, Namibia, Ghana, Nigeria, Senegal and Democratic Republic of Congo. RMB Namibia wants to position itself as the go-to bank for financing renewable energy and other power-generation projects in Namibia,” RMB Namibia Investment Banking Unit’s Juan Oosthuizen told the Windhoek Observer. He added that RMB Namibia is actively working on a number of other renewable energy deals. The investment bank was the lead arranger and funder for N$550million for Ohorongo Cement; it cofunded US$75million for the purchase of Debmarine’s SS Nujoma exploration vessel and was the lead arranger and funder of the purchase of one of Air Namibia’s Airbus A330-200 aircraft. In addition, RMB Namibia also acts as co-arranger for the Government’s US$7,5 billion Medium Term Note Programme listed on the Johannesburg Securities Exchange.

DBN Extends N$118 Million Finance for Lüderitz Wind Farm25 The Development Bank of Namibia (DBN) has announced details of its involvement in financing Ombepo wind farm near Lüderitz. DBN financed N$180 million for the development of the wind farm which is worth N$180 million in total.

http://www.observer.com.na/index.php/business/item/8469-rmb-namibia-shows-appetite-for-energyprojects 25 http://allafrica.com/stories/201708030140.html

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The facility will be owned by a conglomerate of shareholders under InnoSun (95 %) and Lüderitz Town Council (5%). Empowerment grouping Black Diamond Investments owns a 30 percent share in InnoSun.

August 2017

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Tenders ALL government tenders of more than N$35 million will be awarded by the Central Procurement Board26

http://www.namibian.com.na/54053/read/N$35m-cap-on-tenders

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http://www.ope.com.na/pages/tenders.aspx

August 2017

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Country Brief â&#x20AC;&#x201C; NAMIBIA

August 2017

Careers Careers at NamPower Systems Analyst

closing date: 21 Aug 2017 http://www.nampower.com.na/Vacancies.aspx?id=ODQ5NQ== NamPower invests heavily in both its own and the nations human resources, with particular focus on health. Our total staff compliment is just over 800 employees - a figure that remained effectively constant for 3 successive years, notwithstanding the significant expansion in Company activities.

Staff loyalty to NamPower is evident not just in a continuing exceptionally high employee retention rate, but in the results of a Company-wide organisational climate survey, with employees rating NamPower the BEST state-owned company to work for in Namibia. NamPower continues to progress toward a demographic profile more reflective of the nation's mix of backgrounds and heritages, increasing the percentage of woman in our workforce, and maintaining a senior management cadre unique in Namibia for its diversity and representative nature.

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NamPower continues to maintain constructive and mutually beneficial relations with the Mineworkers Union of Namibia.

In keeping with these developments, the NamPower Affirmative Action program received a fourth successive certificate of compliance from the Employment Equity Commission in 2004/2005.