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Sitentu Power Plant Summary

"Recent regular power cuts in Windhoek have raised concerns of NamPower's energy generation stability, given that South African national power utility, Eskom, is said to have again communicated its inability to supply Namibia with electricity during this winter". (New Era Newspaper, July 4, 2011).

Namibia, with a population of slightly more than 2.2 million, is in dire need of electricity supply; hence a fast development of a reliable, clean, safe and adequate electricity generation plant to power the entire urban and rural Namibia is regarded by some of the Namibian government officials as a matter of national security urgency.

Namibia vs ExportersNamibia currently consumes about 2.9 Terawatts (TW) per year, which equals to about 400 Megawatts (MW) per month. NamPower, a national power utility company of the Government of Namibia, currently generates about 35% or 1.2 TW of electricity from its Hydro Power Plant in Ruacana, Coal Plant in Windhoek, and Diesel Power Plant in Walvis Bay and imports about 65% or 1.4 TW of its electricity requirements from South Africa, Botswana, Mozambique, Zimbabwe, Zambia and the DRC to power Namibia.

South Africa has been the primary source for electricity supply to Namibia since the beginning of time. However, about 15 years ago, it informed NamPower that by around 2013, it will no longer be able to supply electricity to Namibia. South Africa has since reduced its electricity supply to Namibia in 2011 and it only accounts for 10%. Zimbabwe has also been supplying 150 MW of electricity to Namibia. However, it has informed NamPower about 10 years ago that by around 2013 it will also cut off its supply to Namibia.

In mid-November 2010, His Excellency President Pohamba and his counterparts from Zambia and Botswana inaugurated the Caprivi Link Interconnector, an N$2.4 billion (US$348 million) electricity line financed by NamPower to supply 300 MW with a capacity of 600 MW of electricity to Namibia, Zambia and Angola. But, that's not sufficient because it's shared among the three countries and it may experience frequent congestion depending on which country has the highest demand for the electricity at any given time.

Mock-up DesignOne of these projects is Sitentu Power Plant (SPP), a 900 MW CCGT Power Plant (net) to provide cleaner, safer, reliable and more cost-effective electricity supply for Namibia. By developing SPP, it will help meet Namibia's electricity need by supplying it to NamPower and export the difference of 727 MW to South Africa at a market prevailing price.

When the Company has implemented its full ecosystem within 5 years, the ecosystem by itself will consume 400 MW of electricity a month, exactly the same amount as what Namibia currently consumes, making it the largest NamPower's single customer.

NamPower's Kudu Gas Project
Nearly for the past 13 years, NamPower has been planning to develop an 800 MW Combined Cycle Gas Turbine (CCGT) Kudu Power Station (KPS) in south-west Namibia. To date, that process still seems to be more than 5 years away from realization. And Groot Power Plant is planned to help make Namibia an energy independent country.

The preliminary technical planning and development for SPP started in July 2011 and the construction will begin within a few months. SPP is expected to be ready for commercial operation by the end of 2017 in order to help NamPower meet Namibia's urgent electricity need.

Developer: Sitentu Power Plant (Pty) Ltd
Location: South-west Namibia
Consultant: Mott MacDonald
EPC: Siemens AG
Development Budget: US$1.2 billion (Est.)
Financing: Debt and Equity Structured

Future Milestones
Future milestones for the GPP are:

  • Conclude Offtakes, PPAs and other project agreements including those with the Government of Namibia
  • Issuance of power generation, transmission, and other licences
  • Commence the procurement process for the construction of the GPP
  • Begin site preparation and other pre-construction work
  • Signing of definitive loan agreements or Financial Close
  • Start of construction for the power station

SPP is being developed in accordance with the Equator Principles, a voluntary set of guidelines based on the International Finance Corporation's ("IFC") environmental and social standards. The IFC is the private sector arm of the World Bank Group and these standards are considered best practice for projects in developing countries.

Simon Kapenda
Groot Group (Pty) Ltd
Windhoek, Namibia
Phone: +(264) 81-250-9027

Groot Groot Suisse is a diverse assest and investment holding company based in Oshakati, Namibia.
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