Gobabis, Namibia welcomed the official opening of two solar power plants this week with a total build cost of $21 million. Ejuva One and Ejuva Two, located side by side, were constructed and managed as one project feeding an estimated 25.8GWh per annum into Namibia’s national grid.
It is among the 14 renewable energy projects commissioned under the interim Renewable Energy Feed-in Tariff (REFIT) programme. The REFIT programme was initiated by the Ministry of Mines and Energy and the Electricity Control Board to establish independent power producers in Namibia.
The Ejuva projects are backed by 25-year power purchase agreements with Nampower.
The opening keynote address was given by the Deputy Minister of Mines and Energy, Honourable Kornelia Shilunga.
The local co-development partners, OKA Capital and BPI Energy Solutions, played a key role in successfully bringing the projects to commissioning. The local partners own 34% of the equity, while developer CIGenCo SA owns 49% and asset manager Mergence Unlisted Investment Managers (Namibia) owns 17% on behalf of its clients.
CIGenCo, a subsidiary of South Africa-listed Consolidated Infrastructure Group Limited, strongly supported by the local Namibian shareholders acted as co-developers and investors, with CIGenCo raising the initial bridging financing required to construct the projects CiGenCo and the local Namibian shareholders also sharing responsibility for aspects of the operations and management of the plants and related electrical infrastructure.
Construction was completed by October 2017 and financial close was reached in April 2018. The project sustained 20 jobs during construction and will support five ongoing Namibian jobs during operation.
The Ejuva project has good access to key infrastructure and grid access, being adjacent to the path of an 11kV Nampower line. The regional substation is located 100m from the site boundary, approximately 200km from Windhoek along the B6 motorway.
Speaking at the event, the Honourable Kornelia Shilunga said: “Ejuva will help to diversify Namibia’s energy mix, increase generation capacity and reduce carbon emissions. We are particularly pleased about the strong local component and the positive impact during construction on local job creation and skills development.”
The two projects were initially conceived by Oiva Anguuo and Benzel Zaaruka, owners of OKA Capital and BPI Energy respectively, working with a few other partners about five years ago. Messrs Anguuo and Zaruuka demonstrated tremendous tenacity to drive the projects through to ultimate completion and are delighted to see their dreams come to fruition. While remaining long-term shareholders in the projects, the two in typical entrepreneurial fashion continue to seek other opportunities in the renewable energy sector.
Speaking on behalf of the Government Institutions Pension Fund, Sara Mezui-Engo, remarked that the projects are post-construction opportunities, allowing for some measure of de-risking and equity upside with the added benefit of providing long-term predictable cash flows matching the liability profile of GIPF.
Mezui-Engo said: “GIPF is delighted to have gained access to the limited early stage first round REFIT projects. Funding infrastructure projects of this nature allow us to empower Namibian shareholders to participate as equals alongside international investors and ensure that the long-term financial flows from the sector are retained in Namibia, whilst benefitting the Fund.”
Hileni Nghinaunye of Mergence Unlisted Investment Managers (Namibia) said: “Our investment rationale is in line with the Mergence ethos of creating shared value. In addition to a 17% equity stake, we advanced loans to finance the equity position of the local shareholders in Ejuva.”
Mergence is already working on finalising its investment in another 5MW project in Namibia where it is looking to acquire a majority stake in the project and provide additional financing to the local partners with further funding likely from a major commercial bank.
“As an added benefit to Namibian pension funds, these investments are regulation 29 compliant as we only finance the PDN shareholders and their direct stake in the projects. The international co-investors are expected to mobilise capital from other sources,” Nghinaunye said.