Xaris back on the cards

GOVERNMENT has decided to reinstate controversial power company Xaris Energy as NamPower’s preferred bidders for the 250MW short-term power solution for the country while waiting to realise the Kudu dream.

Mines minister Obeth Kandjoze announced today that Cabinet decided to go with Xaris as the country’s short-term power solution, despite being advised otherwise.

The Electricity Control Board (ECB), as well as experts have advised that the project is not the best solution for Namibia and that it will cost the taxpayer and the electricity consumers more.

Kandjoze said that Cabinet agreed to give the go ahead on condition that Xaris keeps its original project design, that it will only produce 200MW, that it only remains a stop-gap measure while waiting for Kudu to go online and that the project will be implemented without the involvement of government funds.

Kandjoze also announced that NamPower will now go into negotiations regarding the power purchase agreement with Xaris.

Interestingly, NamPower will have to acquire a 30% stake in the Xaris project, raising fears that taxpayers money will eventually be used to fund the project, unlike the private equity, the Xaris promoters said will fund the project.

Kandjoze could not explain how a project linked to allegations of corruption, kickbacks and political interference was allowed to go ahead. He argued that Cabinet as a collective decided based on the facts on the table to go with Xaris.

In May, President Hage Geingob decided that experts will have to be appointed to advise government on the best solution for the country’s electricity needs, while it awaits the Kudu gas power plant to go into production.

Geingob had to intervene after mines minister Obeth Kandjoze informed him that a section of the NamPower board of directors was undermining him, while the board was also divided and that the power utility’s management also undermined its board.

Kandjoze requested more time and a briefing before the board could award the contract to Xaris, but the board wanted to ignore his request and award the contract since Cabinet had given its blessings last year.

Geingob decided to put the project on ice after red flags were raised, especially around the fact that Xaris Energy changed its terms of reference after NamPower received Cabinet approval to go ahead with the project in November last year.

Attorney general Sacky Shanghala also joined the ECB and Kandjoze in questioning whether the proposed gas fuelled power plant was the best option while the country waits for the Kudu gas-to-power plant.

The 250MW project was first estimated to cost N$3 billion, however, it escalated the cost to N$7,6 billion with the electricity supply set at 400MW.

The Xaris energy team also wanted to have their project replace Kudu as the country’s long term power generation solution.