Namibia’s largest pension fund, the Government Institutions Pension Fund (GIPF) has to date committed N$2.2billion (US$123 million) and invested N$1,110 million (around US$62.15 million) in the country’s renewable energy sector, official figures reveal.
The investments by the Fund – with assets of over N$159.5 billion (US$9 billion) as of 31 July 2023 – mainly in solar energy, have to date created a generation capacity of 104.42 megawatts.
According to the GIPF, it is also looking into the possibility of investing in wind generation, with total renewable energy projects in the pipeline worth N$134 million (around US$7.8 million).
According to the pension fund, the investments have been made through an investment class called real assets or unlisted infrastructure under the Developmental Investment Policy, which is of a long-term nature, that matches well from a duration perspective with the liabilities of the Fund.
The income generated from the investments is also linked to inflation.
The Fund notes that the fund managers that specialise in Unlisted Infrastructure, are guided by technical and financial due diligence assessments before making the investment into any of the projects and only invest when all risks foreseen are suitably addressed.
According to the GIPF, it only considers projects that meet its financial return (hurdle rate) requirements, and which also have a defensive position such as reliable off-takers.
One such project is the Omburu Solar Power Station which was connected to the national grid in March last year and is located in Omaruru.
Occupying 12 hectares of the 40 allotted land, the power station can deliver 20 megawatts of power, which was spearheaded by HopSol Africa and Tulive Private Equity, a leading solar energy company that was appointed as the EPC (Engineering, Procurement, and Construction) contractor for the project.
Omburu consists of 33,000 solar panels and 100 inverters and can supply 20,000 Namibian households with clean renewable energy via the NamPower grid.
Omaruru was deemed an ideal location for the power station, following an Environmental Impact Assessment, which is mandatory for all projects that could have a significant impact on the environment. Omaruru was found to be an ideal location for a solar plant due to the region’s sparse annual rainfall, which translates to an abundance of sunshine.
The Omburu Solar Power Station experiences around 8,760 hours of sunshine annually, with approximately 300 sunny days out of 365, and 33% of these hours provide maximum output.
