On the technical side, the interconnection will be secured through a 400 kV transmission link between Angola and Namibia, extending approximately 160 kilometres within Angolan territory. The project includes the construction of a high-voltage transmission line, the reinforcement and expansion of the Cahama substation in Cunene Province, and the installation of essential supporting infrastructure, including network protection, control and telecommunications systems. It is a high-voltage infrastructure designed to enable significant power flows and ensure integration with the regional grid.
However, the project’s structure reveals a notable feature: financing for the Angolan component will be provided by the Namibian side through the state-owned utility NAMPOWER. The company will be responsible not only for funding but also for delivering the infrastructure within Angolan territory up to the border. This includes constructing the 400 kV transmission line on the Angolan section, expanding the Cahama substation, and building the associated electrical infrastructure required to evacuate and deliver power to the Namibian system.
This arrangement allows Angola to avoid additional pressure on public debt while transferring the initial financial risk to the purchasing partner. In return, the investment will be recovered through Power Purchase Agreements (PPAs), via the agreed electricity tariff and pre-defined adjustment mechanisms. The economic model is therefore based on a “buyer-funded infrastructure” approach, in which guaranteed energy purchases underpin the project’s bankability.
As operator of Angola’s National Transmission Network, RNT-EP will be responsible for integrating, operating and managing the infrastructure within Angolan territory. NAMPOWER will finance, construct and guarantee the off-take of exported electricity. At the institutional level, the governments of both countries will oversee the project, with Angola’s Ministry of Energy and Water responsible for coordinating, supervising and validating all phases of implementation.
500 MW Capacity
In terms of capacity, the project envisages a minimum total of 500 MW, divided into three distinct components:
- 300 MW for direct supply to Namibia under a “take-or-pay” arrangement, ensuring predictable revenues;
- 100 MW for trading in the regional markets of the Southern African Power Pool (SAPP) and the Power Exchange of Africa Central (PEAC), with transmission via Namibia’s network;
- 100 MW of additional flexible capacity, subject to the availability of Angola’s power system.
This structure not only secures an anchor customer but also creates opportunities for participation in regional electricity markets, where pricing can be more competitive.
At this stage, the legislation does not specify a tariff schedule or a fixed electricity price for transactions between Angola and Namibia. Instead, it establishes the framework: remuneration will be determined through a Power Purchase Agreement (PPA) based on a pricing structure negotiated between RNT-EP and NAMPOWER, including periodic adjustment mechanisms.
In practice, the pricing model is expected to follow a cost-recovery approach, incorporating the Namibian-funded infrastructure investment (CAPEX), operating and maintenance costs (OPEX), financing expenses and an agreed margin, spread over the contract period and indexed to the volume of electricity supplied (kWh or MWh).
From an operational perspective, such agreements typically comprise two components: a fixed tariff linked to capacity availability (capacity charge), ensuring investment recovery regardless of consumption levels—particularly relevant for the 300 MW take-or-pay portion—and a variable tariff linked to the electricity actually delivered (energy charge), covering operational costs and potentially indexed to inflation, exchange rates or generation costs.
For the volumes allocated to regional markets (SAPP and PEAC), pricing may follow a more competitive model determined by wholesale electricity market conditions.
The Angola–Namibia power interconnection is moving forward under an unusual structure in which the buyer finances infrastructure within the exporting country while simultaneously guaranteeing electricity purchases. The project positions Angola as a potential regional electricity exporter and strengthens energy integration in Southern Africa.
Source: Expansão
