(Ecofin Agency) - The Kudu gas-to-power project in Namibia is anticipated to see the Final Investment Decision (FID) taken by mid-2016. The project is to play a critical role in meeting the country’s power demand.

Ever since the project landed on the drawing board, the costs have risen dramatically, doubling to about $2.3 billion. The project will require gas from the offshore Kudu field being piped to a planned 885-MW power plant on the coast.

“We are on track. The project is at a stage where it has never been before and we should be able to make a final investment decision or financial closure by June next year,” Immanuel Mulunga, Managing Director of Namcor, told Petroleum Africa at the African Oil Week in Cape Town.

He added that a technical operator had been selected and negotiations were ongoing. Once negotiations are concluded, the anonymous company will hold a 31% stake previously held by Tullow Oil while Namcor will hold a 44% stake in the Kudu gas field.

Talks are also ongoing with the International Finance Corporation (IFC) over the possibility of the IFC taking an equity stake in the venture, Mulunga said adding that the project is expected to produce first power at the start of 2019.