The donor community and various financial institutions are set to enter the market soon, as there is room for investment in generation, transmission and distribution.

These efforts will improve the capacity and efficiency of the power sector in meeting current and future demand.

New analysis from Frost and Sullivan, Strategic Analysis of the Namibian Electricity Industry, finds that the market was worth USD1.3 billion in 2007 and estimates it to reach USD2.0 billion in 2014.

"The Namibian electricity industry will experience growth over the next few years," notes Frost and Sullivan Research Analyst Moses Duma. "Power sector reforms have attracted sizeable investments from the Namibian Government, even as support from various international financial institutions for the country's electricity industry is imminent."

The state electricity utility NamPower has embarked on a rural electrification plan with the aim of ensuring countrywide coverage. While the industry is open to private participation, all generated power must be sold to the state utility through power purchase agreements.

The utility is currently increasing its transmission capacity and poised to boost its generation capacity through the construction of several power plants. However, the growth of the Namibian electricity industry is seriously hampered by the lack of finance.

With hydropower generation as the main source of electricity and an over reliance on South Africa's power utility, Eskom, for imports, Namibia may face a challenging time during droughts and at peak consumption periods. The Ruacana power plant, Namibia's sole hydropower station, is affected by seasonal factors in the dry season when the Kunene River runs dry. Eskom is also facing its own local challenges and their power supply will be inconsistent.

"NamPower has decided to increase its hydro generating capacity as this is the cheaper option," remarks Duma. "There are also prospects of wind, solar and gas power generation."

NamPower is also looking at ways to store water along the Kunene river during the rainy season to facilitate a constant supply of water in the dry season and even in times of drought. However, negotiations with the Angolan authorities on this front are still ongoing.

Strategic Analysis of the Namibian Electricity Industry is part of the Energy and Power Growth Partnership Services Programme, which also includes research in the following markets: Asian Power Plant Markets, Country Industry Forecast: The Indian Energy Industry, Country Industry Forecast: The German Energy Industry, SADC Transmission and Distribution Equipment Markets and Africa Steam and Gas Turbine Markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

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