WITH a looming power supply deficit for Southern Africa in the foreseeable future, continental and local finance institutions alike have outlined their signal of intent to play a catalytic role in the development of infrastructure in the energy sector by providing capital for African nations to meet their own energy needs through renewable energy.
With mining, a sector highly reliant on a stable supply of electricity, contributing about 12% on average to the Gross Domestic Product (GDP) of Namibia, most would agree that increased access to electricity is a necessity in a country like this.
Fortunately, the notion of unhindered power supply could soon be realised owing to the institutions such as the African Development Bank (AfDB), which recently pledged U$12 billion to Africa for the purpose of developing infrastructure in the energy sector at a general meeting that took place in Lusaka, Zambia recently.
The meeting, where Namibia was represented by its Minister of Finance, Calle Schlettwein, saw the AfDB, through its President, Akinwumi Adesina, outlining the significant role it aims to play in Africa over the next decade, by providing funding for the development of infrastructural projects that will create electricity and ensure that the continent’s path towards development and industrialization is not walked in the dark. Adesina augmented the importance of his institution’s pledge by providing figures purporting close to 650 million living without access to electricity.
Schlettwein, on his part purported Namibia as a nation that would be a grateful recipient of the assistance from the bank, outlining the surging tariffs as a problem that not only afflicts the ordinary Namibians, but also the ease of doing business for key economic sectors.
“For Africa to improve her ability to mobilise own financial resources, better utilisation of the natural resource endowment is pivotal. We must get better returns from natural resource, such as minerals and metals, oil and gas, but also fisheries, agriculture and other renewable resources, like wildlife, timber and the likes. Access contracts must be re-negotiated to bring about better rewards,” Schlettwein was quoted as saying, while outlining that the country’s electricity tariffs were about 30% higher than the tariffs of the Southern African region; a situation that has not helped the country’s competitiveness.
Meanwhile, speaking in view of the to the 21st Conference of Parties, held in Paris, France in late 2015, RMB Namibia’s Conrad Dempsey also outlined his organization’s commitment to providing capital for infrastructure development projects in the energy sector, particularly those that conform to the notion of renewable energy.
“While RMB has a long and successful track record in the financing of more than 10,000MW of energy projects throughout Africa, this is not a talk about the great deals we’ve done but rather points to highlight as an interested industry participant working towards sustainable energy solutions for Namibia,” he said.
“We in Namibia have the benefit of a very strong power utility in Nampower, a stable political environment and strong economic growth.
“Government’s role in Namibia’s renewable energy solutions should therefore not be to write the cheques or issue blanket guarantees. With fiscal debt at the self-imposed ceiling, we believe government spending should be applied in the areas where the commercial case for private funding and smart partnerships don’t stack up. Where there is a commercial case, like is largely the case with renewable energy, other sources of funding should be mobilised to bring the solutions,” Dempsey said.
He also added that, “[With] over 26-years of Independence, Namibia has established itself as a sound investment destination for local and foreign capital, mobilising billions of dollars of investment into Namibia.
Significant investors constantly still visit Namibia to bring capital to our mining, energy and infrastructure sectors. For these investors and financiers, policy stability and certainty remains a key imperative. Over the last 5 years of policy stability in mining, we’ve seen more than N$ 100bn flowing into mining and related infrastructure with roughly one new mine per year coming on stream, attesting to the capital attraction that the right policy environment does to an industry and placing Namibia as the number one destination to invest in mining in Africa, albeit with Namibia giving up first place recently.”