Construction of 40MW Otjikoto biomass power plant kicks off

Construction on Namibia’s first biomass power plant, involving an investment of about N$2.64 billion, officially started on Friday and is expected to be completed in the first quarter of 2027.

The 40 megawatt Otjikoto Biomass Power Station, situated 12 kilometres north of Tsumeb, will generate electricity from the combustion of wood chips from encroacher bush harvested from the surrounding areas of the project site.

Mines and energy minister Tom Alweendo, who officiated the event, said with Namibia being a net importer of electricity, this power plant will help meet the increasing demand for electricity.

“The Otjikoto Biomass Power Station, once operational, will not only contribute 40MW to NamPower’s local generation mix but will further contribute to stabilising the national power grid with a fully dispatchable energy source which could provide baseload energy,” Alweendo said.

Bush encroachment affects more than 26 million hectares of land in Namibia.

Thus, the abundance of the encroacher bush and the national shortfall of electricity creates an economic opportunity for bush-to-electricity generation.

“The project will have several macro and microeconomic benefits, which include better livestock carrying capacities through improved rangelands and agricultural productivity, increased groundwater absorption within the harvested areas, and contribute to community growth through direct and indirect job creation through the fuel supply chain and the operation of the power station,” Alweendo said.

According to NamPower, the project will employ about 1 100 people in the construction phase.

“The combination of Forest Stewardship Council-regulated bush harvesting and subsequent sustainable aftercare will result in considerable grassland rehabilitation and ecosystem recovery,” Alweendo said.

NamPower managing director Simson Haulofu said the vision for this power station is not only about producing electricity but also about bringing growth and prosperity to the Oshikoto region, the Otjozondjupa region and surrounding communities.

“The power plant for which we are breaking ground today will create jobs, bring in new skills and activate fresh opportunities for local businesses, thereby allowing them to thrive. For the local business community, the project will open doors for growth, partnerships, as well as new beginnings,” Haulofu said.

Woodchips will be supplied by a combination of long-term fuel supply contracts and ad hoc fuel supply contracts.

The long-term fuel suppliers will be responsible for sourcing, harvesting, processing and delivering biomass woodchips to the power station by use of fully mechanised systems.

Ad hoc fuel suppliers may be required to provide the final processed woodchips or semi-processed biomass to the power station where NamPower will process the biomass to the final required size.

The long-term fuel suppliers include Nexus and Africa Biomass Company joint venture, Utra Trading and Special Supermarkets joint venture, Forestry Group of Companies, Sactos investments and PHP Interactive joint venture and Omuriro Biomass group and Transworld Cargo joint venture.

“You (suppliers) have a significant role to play in the project, that of ensuring the continuous delivery of woodchips to the power station.

We urge you to respect the environmental regulations in place and to work with the communities to help contribute to the restoration of savannah rangelands. I encourage you to network with the farmers present here today, after the event,” Haulofu said.

The project is contracted to DongFang Electric International Corporation.

The project is funded through debt financing from the French Development Agency, amounting to approximately N$2 billion, grant funding from the Mitigation Action Fund of around N$500 million, grant funding from the French Fund for Global Environment of approximately N$60 million, and a N$400-million allocation from the government budget.