Caprivi Interconnector
- Region
- Southern Africa
- Sector
- Energy
- Scope
- IRS
- Grant Amount
- EUR 15,000,000
- Total project cost
- EUR 302,000,000
- Status
- Fully disbursed
- PFG Lead Financier
- EIB
- PFG co-Financier
- KfW, AFD
The Caprivi project consists of the construction of a 200 MW (designed to be upgradeable to 600 MW) High Voltage Direct Current transmission connection from Zambia to the Namibian electricity network, interconnecting the Northern and Western parts of the South African Power Pool (SAPP) network. The purpose is to reinforce the electricity transmission interconnection between Zambia, Namibia and South Africa for provision of a reliable route for electricity exports and imports, support of a competitive regional power market and improved security of supply. The project is a 970 km new transmission line starting from Katima Mulilo, in the north-eastern tip of Namibia, continuing along the Caprivi Strip, a narrow 400 km long section of Namibia on north-east of the country between Zambia and Botswana, and ending in Gerus, in central Namibia.
The total Project Cost is estimated at approx. 302m EUR and will be funded by the promoter's own funds and a co-financing of the European Investment Bank (EIB), the Kreditanstalt für Wiederaufbau (KfW) and the Agence française de développement (AFD).
Project implementation started in mid 2007 and is expected to be commissioned in the second quarter of 2010 in line with forecast. An official launch of the transmission line is planned for the second half of 2010. The promoter, NamPower, has finalised power purchase agreements. The full financing provided by EIB, KfW and AFD was made available in 2009 and the full ITF Grant of EUR 15m was transferred to the three Financiers for subsidising their loans.
The alternative to the Caprivi Interconnector would have been the purchase of coal generated energy from Zimbabwe, or to construct an own coal (base load) and/or gas (peaking) power plants which was environmentally unattractive and offered no potential upside from wheeling and energy trading in Namibia, nor power stabilisation or security of supply benefits to the region. The ITF Grant hence helped facilitating the investment into the economically and environmentally preferable option, with benefits beyond the Namibian borders.
