Observation from the Namibia International Energy Conference 2025, Windhoek
- 2 May 2025
- Posted by: Trudi Stevens
- Category: energy transition
This was the 7th NIEC conference in Namibia and is one of several that happens annually around the energy development sectors.
The overall impression I got was that there is a growing sense of ‘this might actually happen!’ This manifests as growing excitement amongst the younger delegates, a wary optimism amongst the local business community and a determined focus from the international investors, leavened with a great deal of clear warning of what has to be in place if the mammoth project of energy development is going to happen at all.
My impression of the new administration is that they are willing to engage with the various stakeholders and operators – but, that they are facing a tsunami of difficult decisions that have to be made rapidly with imperfect information and little time to prevaricate until they have the perfect picture and the complete data.
The Government, civil service and ministries may not yet have the depth of experienced and qualified personnel to analyse complex, sometimes contradictory information that is coming at them from several different directions.
SWAPO, like many political parties that grew out of resistance movements is very focussed on the wellbeing of their citizens and not just on the development of their economies. There is a sense that the Government wants to move slowly, consult widely and make decisions based mainly on addressing immediate issues of growing youth unemployment and social deprivation.
This was evidenced in the very strong focus on local content policy and implementation in nearly every panel discussion and presentation that I heard. The demand being made of IOCs is the same as every other local content policy in other countries with international investors – local employment, local supply chains, local high level education in the form of scholarships. Unfortunately, as I described in our series on local content, there is no simple straight line to draw between IOCs and the economic development and national capacity building that the people and the Government expect.
Here are some issues that were raised at the conference:
- The Government entities do not have the luxury of time to make decisions – if they miss the annual capital budget allocations that are made in European headquarters, that money will go to other parts of the world and will not return to Namibia – once it has been allocated elsewhere it will not come back. If the projects are attractive financially and risk wise, the money will come.
- Capacity building within the Government and in the education institutions that will create the Namibian workforce is needed and it needs to start now, not in the future.
- Gas is seen as a waste product by the oil industry – it has little value for them. Developing gas supply is technically complicated and expensive. There is a tension between Governments who want it for energy and to drive industrialisation but who can’t afford to pay for its development, and oil companies who just want to get rid of it.
- Infrastructure – although the existing roads are very good, to develop the oil sector will need a vast investment in roads, warehousing, port capacity, gas utilisation plants, energy distribution and water access. Namibia does not have the sheer size of qualified workforce required to build all of that, neither does it have the finance. Public Private Partnerships are one option but the Government, as stated, has an uneasy relationship with business and with entrepreneurs.
- To get these mammoth projects off the ground the international investors need clarity – emphasised repeatedly. Clarity comes from building frameworks to allow decisions to be made on projects and investment; it comes from a clear decision making structure within government – named people, transparent procurement processes, clear criteria for choosing suppliers, easy access to information from international contractors about minimum standards for the supply chain to meet. At the moment, this still seems to be in development from the Government side.
Here, in no particular order, are some of the notes I made during the conference:
- One oil company said that they will employ as many locals as they can but would have unforeseen consequences. For example, they will probably recruit their offshore workers from the fishing community – but where does that leave that sector?
- Mergers and acquisitions – challenge starts when trying to get deals closed – from the SPA point onwards; stakeholder management most important; key message is that the government needs to work with IOCs who care about the operation; a drop in oil price could freeze everything; smaller players need to merge.
- There is a need for clarity on local content; there is a risk of global instability, oil prices – has got worse in the last 12 months; the IOCs have a budget cycle – if the govt miss the cycle they have to wait for the next one; most clients focus on flaring and what to do with the gas; the bank looks at ESG factors in deciding whether to finance or not; what does ‘ESG score’ even mean?
- Local content – Expectations must be clear – deliverables must be certain because it impacts on the commercials. Education is absolutely key. Capacity building is absolutely vital.
- Gas utilisation key markets – Domestic market – internal market – power/electricity. This is the most immediate market; Industry within Namibia.
- Need to displace imports and move electrification to 100%.
- Regional market – South Africa – not that excited about it. Demand is a long way away in the East of SA.
- Could export electricity regionally.
International – floating LNG. – Europe and Asia.
There is a clear opportunity to supply electricity to the Copper Belt in Zambia and to Botswana. 1-12Gw is needed for Copper processing.
- Building local business capacity –
- SMEs don’t know how to access contracts being tendered for – the Ugandan National Suppler Database was cited as an example of what would be helpful in Namibia.
- SMEs are not confident in their ability to meet standards
- IOCs are not confident in SMEs ability to meet standards
- Deloitte said they found SMEs were reluctant to engage in their Baseline Survey. They also made the point that local content requirements should apply to every sector, not just the O&G sector.
In conclusion, Namibia seems to be at the tipping point. The IOCs have found enough viable oil to be interested in continuing the huge investments they have been making, even in a very challenging environment.
The Government appears to be willing to move ahead but, at the moment, is not yet organised into the tight, agile and informed unit it needs to be to forge ahead with the enormous changes it must bring about. It cannot become this on its own – it will need trusted, competent and experienced external advisors to help get it reach this objective.
I think the next 6 months will be pivotal in which direction Namibia will take in developing its oil and gas sector.
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