AIDE-MEMOIRE NAMIBIA: World Bank Energy Sector Mission Namibia Transmission Expansion and Energy Storage (TEES) Project (9674-NA) and Namibia Renewable Energy Scale Up Project (P179377) Implementation Support Mission – August 27 to September 10, 2024 I. INTRODUCTION 1. This Aide-Memoire summarizes the key outcomes and agreements reached during the World Bank (WB) energy sector mission to Namibia from August 27 to September 10, 2024. The Mission expresses its gratitude for the time and cooperation extended by the Government of Namibia, in the Office of the President, Ministry of Finance and Public Enterprises (MFPE), Ministry of Mines and Energy (MME), Ministry of Environment, Forestry, and Tourisms (MEFT), NamPower, Namibia Energy Institute (NEI), Namibia Standard Institute (NSI), and the Environmental Investment Fund (EIF). The composition of the WB team and the list of persons met is provided in the annex attached. 2. The objectives of the mission were to advance the ongoing support to the energy sector, including to: (i) conduct an implementation support mission for the Namibia Transmission Expansion and Energy Storage Project with NamPower (P177328); (ii) conduct an implementation support mission for the Energy Sector Management Assistance Program (ESMAP) funded Namibia Renewable Energy Scale Up project with NamPower (P179377); (iii) hold working sessions to advance technical assistance activities, in particular on energy access and green hydrogen; (iv) hold a coordination meeting with other development partners as a follow up to the meeting held in June 2024. 3. The key action items and next steps reflected in this Aide-Memoire have been agreed upon with the relevant counterparts, and the WB management has endorsed the final version of the Aide- Memoire. II. MISSION FINDINGS AND RECOMMENDATIONS A. Namibia – Transmission Expansion and Energy Storage Project (TEES) Table 1: Key Project Data Board approval, date Financing, source & amount Implementation Period, years May 6, 2024 IBRD: US$100 million loan; June 2025 – December 2029 IBRD Fund for Innovative Global Public Goods (GPG) Solutions: US$15 million grant; and Green Climate Fund (GCF): US$20 million loan and US$3.5 million grant. Proposed PDO To strengthen Namibia’s transmission network and enable integration of renewable energy generation. Proposed Components 1. Second Auas-Kokerboom 400 kV Transmission Line (C1) US$100 million (IBRD) 2. Battery Energy Storage System (BESS) (C.2) US$35 million (combined GPG grant and GCF loan) Technical Assistance (C3) US$3.5 million (GCF grant) Table 2: Current Milestones The processing timeline planned for the project as of January 2024 is as follows: Preparation Appraisal Negotiations Board Signing Effectiveness 1st Disbursement Nov. 2023 Jan. 2024 Jan. 2024 May 6, 2024 Mar. May. 2025 June. 2025 2025 1 4. Implementation of the TEES Project. The Mission held a follow-up meeting with NamPower to discuss the implementation of the project following the approval of the WB Board of Executive Directors on May 6, 2024. NamPower provided an update on the signing date which is planned for the first trimester of the 2025 calendar year to align with the disbursement needs of the project, with the Commented [WM1]: We need different/more simplified first disbursement envisaged in June 2025. language here. In the ML we used 1st Semester which I changed to first half 2025. Here we use 1st Trimester. Either way, I end up unsure as to what specifically are we trying to communicate on the 5. NamPower provided an update on the transmission expansion and energy storage components, timeline. including regarding cost estimates, procurement approach and main project milestones. Regarding Component 1 (the Auas-Kokerboom transmission line and associated substations), NamPower is prioritizing the procurement of the conductor and transmission line. Draft bidding documentation for the transmission line works is in preparation and all necessary environmental, health and safety requirements will be incorporated, as necessary.The recruitment of the bird monitoring specialist is anticipated to commence in early 2025. The Bank will share example Terms of References for bird monitoring with NamPower to facilitate this process.Once recruited the Bank will initiate discussions with the Eskom biodiversity team, to exchange lessons-learned on mitigation measures for transmission line collisions. 6. Regarding Component 2 (the Battery Energy Storage System (BESS)), NamPower is advancing the next steps to comply with internal processes/local procedures including preparing the business case for generation licence purposes. The revised BESS Environmental and Social Impact Assessment (ESIA) was submitted to the Bank for final review and clearance. The procurement plan for the BESS is being updated and will be share with WB for review. B. Namibia Renewable Energy Scale Up Support Project – Energy Sector Management Assistance Program (ESMAP)-funded RETF Grant (P179377) 7. The development objective of the RETF Grant is to enable renewable energy development in Namibia. The Project comprises two components: (i) Component 1: Preparatory studies to support development of variable renewable energy (VRE) projects (US$2.44 M); and (ii) Component 2: Advisory and capacity building to support procurement of VRE projects (US$2.0 M). The team held technical discussions related to the status of the specific activities to be supported by the RETF. 8. The WB disbursed an advance of US$300,000 under the RETF grant to NamPower, on November 14, 2023, for the implementation of activities for the first six-month period. Implementation is progressing well, albeit slightly delayed, with the Expressions of Interest procurement phase for the following activities already completed: the ESIA, Transaction Advisory, Resource Measurement, and Site Studies.. The terms of reference for the resource assessment: wind/solar measurement, as well as for the strategic environmental and social assessment (SESA) and ESIA for wind project (including associated transmission line) were prepared by NamPower and cleared by World Bank in June 2024. Proposals were received at the end of August 2024 and are under review by NamPower. The expected date of contract signing is November 2024. The terms of reference for the other aforementioned activities are being prepared by NamPower and will be released to the shortlisted consultants for the Request for Proposals post review, after clearance from the WB. Activities to support NamPower procure the solar projects under an Independent Power Producer (IPP) scheme will be prioritized. A terms of reference for the Transaction Advisor to assist with procurement of the solar IPP projects will be shared with the WB for review and clearance in October 2024. 9. Training of the NamPower TEES and RETF teams on World Bank Procurement Regulations and Standard Procurement Documents (SPDs), and use of Systematic Tracking of Exchanges in Procurement (STEP) platform will be conducted by mid-November 2024 in readiness for the launch of the transmission line packages. 2 Ongoing Technical Assistance Activities Green Hydrogen (GH) 10. Implementation of GH technical assistance (TA) activities. Meetings were held with stakeholders to advance the GH TA activities. In this context, the mission updated the status of the GH TA program including the following activities: (i) Enabling Environment Assessment (completed), (ii) Support to maximize the socio-economic benefits (on-going with a focus on skills development for the green economy), (iii) Market sounding throughout the GH value chain (on-going), (iv) GH modelling in the context of the VRE integration study exploring the opportunity to use the excess power from the VRE plants serving the GH facilities (on-going), (v) Training on GH and green ammonia (completed), and (vi) Monetization of green attributes of GH (completed, main findings presented during the mission). The team also participated at the Global African Hydrogen Summit, which was held 3-5 September. It was agreed to have weekly calls with on the GH Program team to discuss updates on GH activities in the country and advance the associated technical assistance. 11. Financing of the GH program. Meetings were held with the teams from Climate Fund Managers, Nam-H2 Fund Managers, EIF and the Green Hydrogen Program to discuss potential financing from the WB to EIF (with the Sovereign guarantee) pursuant to which EIF, as an intermediary financier, would channel this funding to SDG Namibia One Fund to support a catalytical role by the GRN to unlock their GH pipeline in the country. Discussions (still on-going) covered the financing needed, the scoping of investments and associated implementation arrangements. In parallel, the next step for EIF is to finalize the discussions with the MFPE following the approval of their Board to engage with the WB to be in a position to issue a funding request letter and for MFPE to be in a position to issue a letter confirming the associated Sovereign guarantee. Energy Access 12. The Bank is providing technical assistance support to MME to assist with the preparation of key mid term access targets that will underpin the National Development Plan 6 (NDP 6). The energy access TA comprises six workstreams: the Geospatial Least-Cost Electrification Plan (GLCEP), Affordability study, Business Model Development, Financial Modality, Off-grid sector assessment, and Clean cooking assessment. 13. Geospatial Least-Cost Electrification Plan (GLCEP). A working session on GLCEP was held with MME. The GLCEP prepared in 2021 requires an update to revisit some key parameters and assumptions underscoring the modeling, including critical cost assumptions. This work will inform the GRN’s plan to achieve universal connectivity through an optimized combination of electricity service delivery modalities. It was agreed that MME will organize bilateral strategic and technical meetings with key stakeholders in the upcoming weeks to discuss their electrification plan and the data input to update the GLCEP. It was also agreed to create a Technical Working Group to speed up gathering stakeholders input. 14. Affordability Study: The Affordability study has been delayed to accommodate the completion of the national census and pending NSA approval (which has now been received). The fieldwork started on October 7 and is expected to be concluded in 6 weeks. Enumerators received training between August 26 and September 11. Additional training sessions for enumerators have been added after the NSA approved the fieldwork on 25 September 2024. 15. Financial Modality. During the kick-off meeting, the MME and WB teams discussed the importance of having a transaction advisor onboard to assist in structuring the National Electrification Fund that will be underpinned by the sustainable electrification business model. It was agreed that subject to funds availability, WB would procure the transaction advisory consultant based on ToR to be agreed with MME to (1) structure the national electrification fund, (2) clarify institutional arrangements, 3 (3) formulate the operational modality of the national electrification fund, (4) finalize the business model, and (5) conduct the sensitivity analysis. 16. Business Model. A working session on the sustainable business model for electrification was held with MME, where the team presented the high-level business model developed by the WB team to assess the achievable electrification rate in 2030 under specific assumptions (the model will be fed with findings from GLCEP and affordability studies). In particular, i) assessing how the electrification rate can be achieved in 2030 and in which conditions, and ii) informing the structuring of the electrification fund. It was agreed that the WB team would continue to work on the high-level model as inputs are provided from the ongoing studies, while the transaction advisory consultant will elaborate further on the detailed business model once on board. 17. Off-grid solar: During the mission, the team engaged with MME to discuss the future of off- grid solar solutions in advancing Namibia’s universal access goals. MME acknowledged that a fully private-driven model may not work well in the Namibian context due to low population density and challenges related to achieving economies of scale. Additionally, the general sentiment regarding off- grid solar products is negative. This is partly due to a lack of awareness and the absence of mandatory standards for these products. As a next step, the team is exploring concession models that will allow for public-private partnerships whereby private companies can bid for the opportunity to supply solar solutions in designated regions, plan public awareness campaigns and establish quality standards for equipment, design and installation that will include verification and certification. Clean Cooking. During the mission, WB team engaged with key stakeholders, including the NEI, UNDP, GIZ, EIF and Namib Desert Environmental Education Trust (NaDEET), to advance the country’s clean cooking transition. A technical deep-dive discussion was held with MME, where the team presented the concept of clean cooking, the Multi-Tier Framework (MTF) for Cooking, and preliminary findings from desk-based research. The mission discussed the objectives and methodology for developing a Namibia Clean Cooking Transition Roadmap, which will provide insights for the NDP- 6 and inform future clean cooking initiatives. It was agreed WB will adjust the draft clean cooking transition roadmap developed with MME, incorporating the feedback and developing three scenarios to reflect Namibia’s commitments, with demand- and supply-side data expected from the ongoing affordability study. The roadmap’s refinement and continued collaboration with MME and key sector players will be crucial in accelerating Namibia’s clean cooking transition. These efforts also aim to integrate realistic, clean cooking targets into the draft NDP-6 and compare them with global targets on universal access and net-zero scenarios. Other Technical Assistance Other meetings 18. Donors’ coordination meetings. Development partners involved in the energy sector in Namibia, guided by MME, updated each of their existing and planned activities in the country with a view to enhance synergies. EIF also provided an overview of their Green Impact Facility, a blended financing facility operational since 2023, targeting small and medium enterprises for social and environmental projects. It was agreed that MME would also provide updates at the next coordination meeting. II. NEXT STEPS AND AGREED ACTIONS Table 3: Status of Agreed Actions TEES Status of Agreed Actions Responsible Status/Due Date 1. Updated Procurement Plan NamPower October 15, 2024 2. Training of NamPower team on World NamPower, WB November 15, 2024 Bank Procurement Regulations and SPDs 4 RETF Status of Agreed Actions 3. Share the Terms of reference for the Transaction NamPower October 15, 2024 Advisor for solar IPPs 4. Plan an implementation workshop in July for the NamPower, WB Completed transmission line project Other Technical Assistance Activities Green Hydrogen 5. Follow up discussions on WB potential operation EIF, MOFP, WB On-going to support GH deployment 6. Organize weekly calls with the GH Program Team WB,NGH2P On-going to discuss updates on GH activities in the country. 7. Create a shared folder with key GH documents WB, NGH2P Completed Energy Access 8. GLCEP: Organize bilateral meetings to gather MME On-going (to be geospatial data and input to update the Geospatial completed by October Least Cost Electrification Plan (GLCEP) 25, 2024) 9. GLCEP: Set-up a Technical Working Group, MME, WB October 30, 2024 Compile and update the geospatial data for the MV and LV network. 10. GLCEP: Prepare and review the ToR to hire the MME, WB October 15, 2024 firm to update the GLCEP. 11. Affordability study: submit the revised MME, WB Completed questionnaire and documents for the NSA to review 12. Draft ToR for the financial/transaction advisor. The MME, WB October 15, 2024 WB team will develop the first draft, which MME will review. 13. Organize bilateral meetings with clean cooking MME, WB Completed stakeholders (e.g., the Department of Petroleum, the Namibia Biomass Industry Group) 14. Update the Clean Cooking Roadmap for the NDP- WB October 15, 2024 6 first draft 15. Develop off grid solar diagnostic document with WB November 15, 2024 findings from key informant interviews and recommendations on how to support the off grid solar market 16. Develop consumer awareness framework MME, Power On-going Africa, WB 17. Develop quality assurance workplan for off grid WB, MME On-going equipment, system design and system installation in collaboration with Verasol and MME 5 ANNEX Composition of WB team and list of officials and participants Composition of the WB team The mission team was led by Nadia Taobane (Senior Energy Specialist), and included the following team members who joined join in-person or virtually: Sandhya Srinivasan (Senior Climate Change Specialist); Tandile Msiwa (Senior Financial Management Specialist); George Daniel (Senior Procurement Specialist); Juanita Whitfield (Environmental Specialist); Aimona Tashieva (Senior Social Development Specialist); Thokozani Kadzamira (Senior Gender Expert); Reiner Jagau (Senior Power Expert); Abderrahim Jamrani (Senior Power Expert); Silvia Zinetti (Green Hydrogen Expert); Inka Schomer (Senior Socio-economic Expert); Jingyi Wu (Clean Cooking Expert); Bryan Bonsuk Koo (Energy Specialist); Hyun Jin Choi (Multi-Tier Framework Survey Expert); Asmelash Haile Tsegay (Survey specialist, DECLS); Shaky Sherpa (Energy Access Expert); and Ifunanya Nwandu (Offgrid Solar Expert). Remote support has been provided by Erika Prinsloo, Senior Executive Assistant, in Pretoria. List of officials and participants Name Institution/Title Office of the President Mr. James Mnyupe Office of the President, Presidential Economic Advisor, Head of the GH Program MME Mr. John Titus Director of Energy Mr. Nico Snyders Deputy Director, Renewable Energy Division Mr. Abraham Hangula Deputy Director, Energy Planning and Research Ms. Susan Tise Chief Energy Researcher, Renewable Energy Division Mr. Leonard Nekwaya Electrical Engineer Ms. Lilian M. Siboleka Solar Revolving Fund (SRF) Ms. Nicodemus Sebetwane Solar Revolving Fund (SRF) NamPower Mr. Andre Barlow Head Treasury & Strategic Finance, NamPower Mr. Joe Mukena Senior Manager Strategic Finance, NamPower Mr Gordon Gadney Senior Manager Strategic Planning and Modelling, MSB, NamPower Mr Elifas Iilende Engineer Generation Projects, NamPower Mr. Fred Bailey Senior Engineer Generation Projects (BESS and PV), NamPower Mr. Benedictus Mingeli Senior Manager Generation Projects, NamPower Mr. Gert Fourie Senior Engineer: Planning Transmission, NamPower Ms. Mercy Handura Senior Accountant Treasury, NamPower Finance Mr. Calvin Sisamu Senior Environmentalist Transmission, NamPower Mr. Christo Visser Electricity Pricing, NamPower Finance Mr. Martin van der Merwe Senior Engineer Transmission Capital Projects, NamPower Ms Maria Modestus Project and Management Accounting, NamPower Ms Iyaloo Shimutwikeni Generation Capital Projects: Financial & Commercial, NamPower Mr. Leandro Kapolo Executive: Transmission, NamPower Dr. Rosalia Sinvula Senior Incorporated Engineer, Transmission, NamPower 6 Mr Kondjeni Nghitevelekwa Project Manager, Substation Projects, NamPower Ms. Etuhole Mbango Electrical Engineer, NamPower EIF Mr. Benedict Libanda Chief Executive Officer Mr. Yvette Hausiku Business Development Officer Ms. Bernadette Shalumu Manager Programming Mr. Karl Aribeb Chief Operational Officer Green Hydrogen Program David Nghimwenavali Mnyupe’s executive assistant Joseph Mukendwa Policy, Planning and Strategy Head Eline Van Der Linden Environmental, Social and Governance Head Theopolina Kapani Technical and Construction Head Nikol Anuschka Hearn Head of Transactions Roswitha Gomachas Legal Department Lead Nerago Ndoroma-Ndeitnga Head of Program Management Nam-H2 Fund Managers Ms. Mercia Geises CEO of Nam-H2 Fund Managers Engie Ms. Laurence Charlier Project Manager Donors, Embassies and Partners Mr Moketsi Enos Thobela Chief Energy Investment Specialist, AfDB Political, Economic, & Commercial Section Chief, Embassy of the Ms. Alexis H. Haftvani United States of America Mr. David Jarrett Consultant, Power Africa (SAEP) Mr. Jan G. Andreas Principal Portfolio Manager Southern Africa, KfW Mr. Bert Hagenkort Senior Technical Advisor Ms. Aisma Vitina Head of APRA Secretariat, Danish Energy Agency Mr Kunihiro Butsuen Project Formulation Advisor, JICA Namibia Ms. Ujama Swartz Programme Officer: Communications and Technical Operations, JICA Mr. Akihiko Hoshino Resident Representative, JICA Namibia Mr Nopenyo Dabla Programme Officer, Partnerships for Renewables in Africa, IRENA Ms. Uazamo Kaura Head/Programme Specialist, UNDP Namibia Commonwealth National Climate Finance Adviser for Namibia, The Mr. Eric Chipeta Commonwealth Ms Selma Shitilifa Project Manager, City of Windhoek Climate change and inclusive use of natural resources / component Ms. Nicole Botha coordinator, GIZ Mr. Rodney Seibeb Sustainable Development Expert, GIZ Ms. Irish Goroh Program Specialist, UNDP Mr. Nicky Gaseb SGP Country Coordinator, UNDP Director and Co-Founder, Namib Desert Environmental Education Trust Ms. Viktoria Keding (NaDEET) Mr. Harald Schutt Independent consultant, solar cooking Namibia Energy Institute 7 Ms. Helvi IILeka Centre Manager, Namibia Energy Institute REDs Mr. Isaak Nekwaya Head of Electrification, NORED Mr. Jason Iyambo Executive Manager Network Engineering and Expansion, CENORED City of Windhoek Mr. O’Brien A Hekandjo Strategic Executive: Electricity Strategic Executive: Housing, Property Management and Human Mr Faniel Maanda Settlement Ms Jennifer Comalie CFO SACREEE Mr Kudakwashe Ndhlukula - ED MEFT Mr. Johnson Ndokosho Director of Forestry, MEFT Ministry of Industrialization and Trade (MIT) Mr. Michael Humavindu Deputy Executive Director: Industrial Development National Standards Institute (NSI) Mr. Immanuel Owoseb Standards Development and Training Officer Off Grid Solar Private Sector companies Tuwilika Johannes Country Manager, Iseli Energy Stefanus Iyambo Managing Director, Greenpath Energy Solutions Leticia Ed Shwepo Solar Solutions Arinze Okafor Co-founder, Bellamatrix Peter Becker CTO, Alensy Solutions (PTY) Limited Rahab Kaavela Solar Age Thomas Thomas Engineering Director, Artiflex Fortunatus Katataiza Fortune Solar Power Uli von Seydlitz Mcon Consulting Group Paulus Fillepus Country Manager, MPower Africa Linda Shitumbapo Head of Renewable Energy, MegaTech Jazire Prescott Future Solar 8