….Namcor looks for additional investors to fund project
By Confidente Reporter
THE cost of rolling out the Kudu gas project has ballooned to N$32 billion from the initial N$14 billion- two years ago which translates to US$2.3 billion- due to the weakening Namibian dollar against the United States dollar, Confidente has learnt.
Confidente has also learnt that Namcor which owns a 44 percent stake in the gas project with BW Kudu Limited a subsidiary of BW Offshore Singapore Ptv. Ltd owning the remaining 56 percent is currently looking for another investor to take a 10 percent stake in the multi-billion dollar power project.
Namcor Managing Director, Immanuel Mulunga, told Confidente yesterday that the planned 885MW Kudu Gas-to-Power project will require US$1 billion (N$14 billion) for its upstream component while the power station will require a further US$1.3 billion that translates to about N$18.2 billion.
Confidente also understands that Namcor’s Norwegian/Singaporean partners BW Kudu Limited might have to fund about N$14 billion (US$1 billion) of the project.
“The upstream component of the project will cost about US$1 billion of the project while the power station component will cost another US$1.3 billion,” Mulunga said.
Mulunga explained to Confidente that the reason behind the parastatal looking for an additional investor was because Government was most likely not going to fund the project.
“Any genuine investor that firstly has the appetite for this kind of project and secondly the cash resources is welcome to approach Namcor to invest in the 44 percent that is currently available for Namcor. We are proceeding with this approach precisely because Government has made it clear that they are likely not to invest in any power projects including Kudu…It really depends on the offer we get, anything from 10 percent onwards will go,” Mulunga said.
Mulunga however could not be drawn into commenting on how much the project will generate in revenue yearly once completed.
However impeccable sources privy to the matter told Confidente that at the moment it was difficult to give revenue projections.
“It’s premature for Namcor to know the exact revenue projections at the moment because they still need to get the Project to the Final Investment Decision (FID) stage. The signing of the deed of assignment and the entry of the investors onto the project means there is now a chance to get to the FID at least. At the FID the decision might be either to proceed or not to invest if everything is not satisfactory to the lenders,” the source said.
Namcor this week announced that it had agreed to accept an investment offer from BW Kudu Limited for a 56 percent working interest in the Kudu power project.
The parastatal also added that it had agreed to transfer the role of field operator to BW Kudu, but will work closely together with BW Kudu within a joint team as the field is prepared for the FID and the subsequent field development (which will include the drilling of production wells, the construction of subsea and gas transmission pipelines and the installation of a Floating Production System (FPS).
The Kudu Gas-to-Power project is a key power generation project which will decrease reliance on imported power and accelerate economic development. It involves the development of the offshore Kudu gas field to deliver gas through a 170km-long pipeline to a power station to be built at Uubvlei, some 25 kilometres northeast of Oranjemund. The station will be connected to the Namibia and South African electricity grids by new transmission lines, Namcor announced.
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