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Power and Infrastructure Finance in Namibia: A Plain Guide

Power projects in Namibia are financed mainly on the strength of their power purchase agreement (PPA), either with NamPower or, under the Modified Single Buyer model, directly with large customers. Lenders look at who buys the power, for how long, and on what terms.

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How is Namibia's power market set up?

NamPower is the national utility. It owns and runs the transmission grid and buys power for most of the market. The Electricity Control Board (ECB) is the regulator.

Since 2019, Namibia has used a Modified Single Buyer (MSB) model. Under it, independent power producers (IPPs) can sell directly to large "contestable" customers over the national grid, for up to 30% of that customer's energy demand. NamPower stays the buyer for the rest of the market and the supplier of last resort.

Why does Namibia need new power?

Namibia imports a large share of its electricity from neighbours in the Southern African Power Pool (SAPP), such as South Africa, Zambia, and Zimbabwe. The government's 2022 integrated resource plan reports that imports met about two thirds of demand in 2021.

The main local plant is the Ruacana hydro station on the Kunene River. Solar and wind plants are mostly owned by IPPs.

Who can buy the power?

A Namibian power project usually sells to one of these off-takers.

  • NamPower, under a PPA.
  • Contestable customers under the MSB model, such as mines and large industrial users.
  • Regional electricity distributors (REDs) and local authorities, where the rules allow.
  • Buyers in other SAPP countries, with an export licence from the ECB.

What do lenders look for?

Lenders look at the credit quality of the off-taker, the length and terms of the PPA, grid access and capacity, the tariff and currency of payment, and the permits and licences in place.

A mine or industrial buyer under the MSB model may need to show strong credit or give security. Projects often combine developer equity with loans from local banks, DFIs, and international lenders.

Where does Vektron Merchants fit?

Vektron Merchants is a marketing agency for energy, commodities, infrastructure financing and industrial firms. We find buyers, offtakers, lenders and partners for companies in these four industries, and we secure meetings with the people who sign.

Frequently asked questions

Can an IPP in Namibia sell power directly to a mine?

Yes. Under the Modified Single Buyer model, IPPs can sell directly to contestable customers, such as mines, for up to 30% of that customer's energy demand, subject to grid capacity.

Who regulates electricity in Namibia?

The Electricity Control Board (ECB).

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General information, not investment, legal or tax advice. Facts are from the public sources listed and may change.