(Ecofin Agency) - The National Petroleum Corporation of Namibia (Namcor) is firm that the much-expected N$35 billion Kudu gas-to-power project, which has been flaunted as the answer to the country's electricity woes, is feasible and bankable.

In actual fact, Namcor has before now spent N$285 million in executing a cabinet directive to develop the Kudu gas field. Allafrica reports

While presenting Namcor's annual results and introducing Immanuel Mulunga as its new managing director, the corporation's chairman, Johannes !Gawagab (photo), stated that they hoped to finalize the technical operator and all final contracts for the project by the end of December.

"The strategic importance of Kudu to Namibia cannot be over-emphasised, as it will ensure energy security for achieving the targets of Vision 2030 and NDP4; will realise the macro-economic benefits of a gas resource, and will ensure Namibia's electricity tariffs remain competitive," ! Gawagab said.

Though the Minister of Finance, Calle Schlettwein, recently announced that the project is not financially feasible and would have serious consequences for the country's budget, !Gawagab yesterday said: "The choices we make today regarding oil and gas will determine the future of this country for many years to come."

!Gawagab revealed that a 885 MW kudu power plant, to be based in Oranjemund, will be in a position to export electricity to Zambia and South Africa adding that BW Offshore, which will take up the 31 % equity vacated by Tullow, as well as finance the 25 % left vacant by CIECO's departure from the project, has been selected as the project's preferred technical operator.

Namcor is to cover the remaining 44 % through funding from government as defined in the detailed support package.

"We believe the project is viable even if it is difficult for government to provide funding. There are people with an appetite to invest in Kudu. Investment in this project is very important for the economic future of Namibia," said Mulunga Namcor's incoming MD.

However, he noted that the finalization of the Gas Sales Agreement is at an advanced stage, as major elements were agreed between downstream and upstream divisions prior to Tullow's departure.