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Namibia's Infrastructure
According National Renewable Energy Policy Paper issued by Namibia Government’s Ministry of Mines and Energy in 2017; the primary energy consumption in Namibia has been growing at a rate of 3.5% annually, on average. The composition of Namibia’s Total Primary Energy Supply demonstrates the predominance of energy from oil. Overall, primary energy in Namibia is derived from liquid fossil fuels (petroleum, diesel, paraffin, and liquefied petroleum gas), biomass (charcoal, wood, and processed wood products), and coal. Namibia dependence of fossil fuel energy is significant despite the fact that it boasts the world’s second highest solar irradiation regime, measures up to 7kWh/m2/day of global horizontal irradiance. See figure below.
Relaxation of Contestability Criteria
Namibia’s reliance on imported power renders a unique opportunity to ANIREP highlighted by a MSBM initiative to boost spare capacity generation in order to take advantage of the unwinding electricity import contracts, before and beyond 2025, by providing local viable power generation. Opportunity therefore exist in displacing some imported energy by phasing the implementation of new bilateral energy trading within Namibia, to coincide with the expiration of these import contracts.
Timeline for Unwinding of Import Contracts and MSBM Implementation
The implementation of the Modified Single Buyer Model (MSBM) in phases, as illustrated in table below, highlights prospects and opportunities for ANIREP to grow revenue as an eligible IPP, EPC and O&M participant, post the Proposed Acquisitions. From being seller or importer/exporter; to being a supplier to on grid contestable customers; to being a supplier to off-grid, mini-grid, captive/embedded, or being trader of renewable energy.
ANIREP’s Investment Model
To understand the rationale for considering an EPC and O&M contractor as a first acquisition, it is important to first revisit ANIREP’s ambitions. That is to be an integrated independent alternative energy player within the value chain (see Figure 1 below).
The grasping of the downstream activities namely; Project Development, Financing, Construction, IPP and O&M, is critical to the long-term ambitions of ANIREP. Failure to successfully compete in these activities will curtail ANIREP’s capacity to be a leading infrastructural renewable energy company in Namibia and beyond.
The renewable energy value chain, after PV Equipment Manufacturing stage, can be broken down in two groups of activities, as follows;
| Pre – COD | Post – COD | |||
| Project Development (EPC) | Financing
(EPC) |
Construction
(EPC) |
IPP | O&M |
| These are Greenfield or Brown fields projects started by sponsors with ideas but without the PPA and IPP license (in generation) or projects without necessary authority approvals such as Environmental Impact Assessment (“EIA”) of generation, transmission and distribution projects. | These are Greenfield or Brown fields projects with PPA, IPP license and EIA however, lack funding and technical ability to execute properly. The Manager will be highly involved in order to de-risk and develop these projects.’ | These are Greenfield or Brown fields projects with PPA, IPP license and EIA however, lack funding and technical ability to execute properly. The Manager will be highly involved in order to de-risk and develop these projects.’ | These are assets that have reached COD with proven and predictable cash flows. They are projects that have completed the construction stage and have started operating in generation, transmission or distribution. | These are assets that have reached COD with proven and predictable cash flows. They are projects that have completed the construction stage and have started operating in generation, transmission or distribution. |
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Alpha Namibia Industries Renewable Power Limited (ANIREP) was listed on the Namibia Stock Exchange (NSX) development board in 2018. It has become the second Capital Pool Company (CPC) and the first Alternative Electricity Company on the bourse.