On 8 August 2024, the National Planning Commission of Namibia together with Ministry of Mines & Energy, Regional Electricity Distributor NORED Electricity and German Development Cooperation through KfW Development Bank signed a grant agreement for 7.5 m Euro (equivalent to approx. 150 m NAD) for increasing access to electricity for households and small and medium enterprises in Namibia.

The funds complement MME’s own budget allocation for electrification of Namibia and have been earmarked for peri-urban on-grid and rural remote off-grid electrification mainly in North-East and North-West locations of Namibia. As per latest statistics, the overall rural electrification rate stands at 20 -30% while overall electrification stands at roughly 55% countrywide.

Namibia’s un-electrified areas are often far away from the grid and characterized by low population densities and / or highly dispersed settlements. In order to ensure long-term sustainability and economic viability of the new connections for the Regional Electricity Distributor (RED), the grant will cover the investment cost. At the same time, by agreeing on a mixture of peri-urban on-grid and remote off-grid electrification connections, the new lines will generate enough income to ensure regular maintenance by the Regional Electricity Distributor for this operational area while maximising the developmental impact.

During the contract signing ceremony, Honorable Obeth Kandjoze warmly welcomed the funds from the German Government, saying “that data from the recent census indicates that the Namibian population amounts to 3.01 m people and the actual electrification rate might even be lower than 55% and in particular lower in the rural and remote areas. Hence, the access-to-energy project is a much-needed initiative with substantial impact and more projects of this kind will augment government´s efforts to increase access to energy.”

His words were echoed by the Executive Director of Ministry of Mines & Energy, Mr. Penda Ithindi, appreciating that “the 150 m NAD are well complementing MME’s own budget and electrification plans. According to the Access-to-Energy Project plan, close to 4,000 connections will be installed which translates to provision of energy access for 18,000 to 20,000 people as well as productive users.”

Project preparation included technical, environmental, economic and developmental assessments as well as extensive stakeholder engagement in order to identify the most eligible locations for this first of its kind approach. Nored’s Acting CEO, Mr. Toivo Shovaleka, announced that “signing the contractual agreements today, implies that we can kick-start the project already next week by working on tender documentations.” The project design foresees that NORED is responsible for overall project implementation and will partly engage service providers for the roll-out. With regards to off-grid solutions, the funding proposal is intended to strengthen respective operating providers in their growth.

The Ambassador of Germany, Dr. Thorsten Hutter, rounded off the ceremony by summarizing that “the Government of Germany through the Federal Ministry of Economic Cooperation and Development, implemented by KfW supports the Government of Namibia in creating inclusive development opportunities for all Namibians while combating climate change. The Access-to-Energy Project will fight energy poverty by expanding and improving electrification in rural and peri-urban areas and thus initiate the productive use of electricity which will expand income opportunities and enhance economic development.”

The success of the grant program will be measured along indicators of which one is the installation of at least 2,910 new on-grid connections (minimum TIER 4) ) and 990 new off-grid connections (minimum TIER 3). Another indicator refers to the installation of 400 kW off-grid power capacities for mini-grids based on solar PV plus storage. Project completion is envisaged for end 2026.

German Development Cooperation 1990 - 2024

From 1990 until today, the funds of German Development Cooperation amount to EUR 1.6 billion (approx. NAD 32.3 billion). The KfW portfolio under implementation comprises 39 projects with a total volume of EUR 697.2 Mio (approx. NAD 12.9 billion), while future projects with a volume of approx. EUR 200 Mio. (approx. NAD 6.6 billion) are under preparation.