SOUTHERN Africa is being seen by many international investors as a 21st century treasure trove. More power will be needed to expand mining activities and new service industries such as tourism and food processing.

New hydro projects across Africa and their funding may depend on Namibia: specifically, the Namibian government decision on the Epupa dam project, in the north of the country on the Angolan border. Non-governmental organisations (NGOs) and environmental organisations have Epupa in their sights as a litmus test for Africa, after campaigns on Arun and Bakun.

The Namibian government’s members’ moral credentials should stand scrutiny by even the most ardent NGO – many have sacrificed a good part of their lives in exile. Videos and the various feasibility studies on the project, which is on the Kunene river, focused on the Epupa falls and Baynes mountains, have been made easily accessible to the public.

The NGOs say whatever the feasibility results, a political decision has already been taken to go ahead. But in January the Namibian High Commissioner in the UK, Ben Ulenga, said no decision had been taken – indeed could not be taken, until processing of reports and public hearings was complete. ‘There are a number of options to be considered so nothing final could be decided at this stage,’ he said. ‘If the project is viable then the Namibian government will go ahead, if it is not’ then we will not pursue it,’ he added.

In the interests of transparency it would seem to be no accident that, for the various studies on the project, the government called in ‘green’ aid agencies — the Norwegian Agency for Development Co-operation (NORAD) and the Swedish International Development Agency (SIDA). NORAD knows about prolonged battles and community disruption because of the hydro scheme at Alta in northern Norway which is almost a match for Epupa. SIDA and NORAD, through Norconsult and SwedPower, did the 1993 Epupa pre-feasibility study. It said the project was viable and should go to full feasibility.

  Sweden knows the Namibians. It gave heart and hearth to many Southwest African People’s Organisation (SWAPO) members for more than two decades. In January 1998, Sten Rylander, assistant director general of SIDA, and ambassador when the pre-feasibility studies started, said Namibia was one of the driest countries in the world and had a great need of power and water. Speaking from Sweden, he said as far as SIDA was concerned, if the studies showed that it was viable then the test would be if the monies needed were forthcoming from the private and international lending sectors. He said he believes that the World Bank has still not really done a deep study of Epupa.

The power situation

At the moment Namibia imports power from South Africa. The aim for Namibia is to reverse the situation, eventually exporting power to South Africa in around 2007. Namibia has little coal. Power comes from the Gove dam in Angola on the Kunene. This feeds the Ruacana Falls power station, which is above Epupa which, in turn, is above the Baynes mountains stretch of the Kunene. In mid-1996 Ruacana was reported to be operating at half capacity. The Gove Dam 300km upstream, which regulates the Ruacana run-of-the-river station, remains damaged from Angola’s civil war. Up to now, the shortfall in Namibia’s power demand – a demand which currently totals 240MW – has had to come from South Africa.

The NGOs say Epupa should be left alone to protect the tribespeople and the environment and Namibia should use its gas reserves. This would come 180km offshore from the Kudu field at Oranjemund (1000km to the south of Epupa), which was discovered in 1970 by Chevron. In May 1997, Nampower (formerly SWAWEK) said a test well drilling showed a proposed Shell-Nampower-Eskom 750MW gas plant could be fuelled for more than 20 years. Shell says it would not only make Namibia self-sufficient but allow power export. Earthlife Africa (Namibia Branch) says power from Kudu would cost 1.9-2.8 US cents per kWh against 4.7-6.9 cents for Epupa hydro power. However, some say that Kudu and Epupa would complement each other, and the gas-fired plant was not a cause for rejecting the hydro option.

As Angola is a party to any developments of the 1969 Kunene Master Plan it has a direct stake. The NGOs say faster rehabilitation of the Angolan Gove dam would bring far more power into the systems at peak times.

  A company called Solar Age has been reported as saying solar power suits the scattered population profile of Namibia and could bring power production up by another 175MW by the year 2000. The same firm has identified windfarms on the Atlantic coastline which, however, government experts say are not workable.

Environmental argument

The NGOs say if the dam goes ahead the human habitat of some thousands of the 12 000 or so Himba semi-nomadic tribespeople would be severely damaged, with loss of 75km of productive land along the river, thousands displaced and loss of ancient burial and fire sites. The tribespeople, in this sparsely populated country, would also face a threat from diseases imported by construction workers and future local industries. Risks are said to include bilharzia, malaria, hepatitis, TB and HIV. NGOs say there would be salt leaching to riverine topsoil, estuary salting further up river, damage to offshore fisheries and a reduction in the warm water plume which feeds out into the Atlantic covering 100km2.

The International Rivers Network (IRN) says at risk are 234 recorded bird species and animals, including hippopotamus, rare otters, cheetah, leopard and impala. The IRN, based in Washington, USA, reports a hydrologist familiar with the proposals as saying that drought and flows in the past decade indicate the Kunene would have produced full power generation capacity for only two out of 10 years for a dam 40km below Epupa, and one year in 10 for a dam at the Falls. IRN also says that there is not enough water flow to meet both power and water supply needs for the population. Further reservoir evaporation would be more than the water used by Namibia’s urban population, when water is already in short supply.

The economic argument

NGOs also suggest that economic potential may be flawed. Demand from the Rossing uranium smelters is falling and any future recession in the mining industry would cut demand. They say there would be losses from potential tourism in the Epupa Falls region, and tourism industry needs would be better met by a series of small generating stations. Furthermore, they accuse the government of being interested, for political reasons, in trying to create employment in the north for votes. Much of Namibia’s wealth creation and jobs tends to be in the south.

So who would fund the dam? The Namibian government may be resource-rich but it faces the same cash flow problems as other southern African nations who suffered during the wars affecting the frontline states. It has recently reached an agreement with De Beers which will give Namibia revenues from 50 per cent of diamond mining activities in Namibia. But both Epupa hydro and Kudu would need long term loans from international banking institutions and possibly private utilities or enterprises. The various feasibility studies have to prove an economic case for loans from bodies such as the World Bank. However, there is confusion about the Bank’s position.

The IRN says the Bank stated in a 1993 study on Namibia’s power needs that the project was not economically viable without sales to South Africa. A World Bank spokesman said at the end of 1997 they had not been approached by Namibia for assistance. The IRN also quotes a January 1997 US State Department briefing saying the dam would not be financially viable unless a large amount of its electricity is sold to South Africa. It added this would put Epupa ‘in direct competition not only with Kudu gas but with other potential energy projects such as the Pande gas fields in Mozambique. At an estimated cost of US$800M, it is unlikely that the dam would have a significant competitive advantage over such projects.’ That cost figure is one of a number which appear in connection with Epupa, starting from around US$500M.

Namibian officials say that potential sales to South Africa are more interesting today then several years ago. In May 1996 Namibia announced plans for a 900km 400kV connection to import power from South Africa at a cost of around US$130M.

A spokesman from South African utility Eskom said in January 1988 that demand there had improved, but the country still had its own spare capacity. Installed capacity was 39 000MW with peak demand of 25 000MW. This was despite mothballing three plants in 1992-93 and putting a new plant under construction in the slow lane. They have a 1540MW contract, and are getting around 500MW, through a 500kV line (to be expanded to 1000kV) from the Cabora-Bassa dam in Mozambique. The latter is producing well under capacity and this hydropower is cheaper than gas.

  South Africa is still a great coal user and always will be, albeit with the emphasis on clean coal. After all, people will always use what is to hand.

Eskom’s approach now is to look at an integrated strategy involving all neighbouring countries. They cannot see a need to take power from Kudu or Epupa until at least 2015. They also have an interest in what happens in Zaire where hydro could eventually be brought down through Zambia into South Africa. Of course neither Angolan, NGO or RSA perspectives address the political question of poorer Namibia wanting to reduce dependence on foreign power sources for both price and stability reasons. The World Bank and other major aid agencies are also fearful of projects which could repeat the embarrassment caused them over Pergau, Arun or Bakun.

Technical studies

The technical studies do tackle all the issues raised by the NGOs and are frank and direct. But the first place where Namibia must satisfy itself and international public, although not necessarily expert, opinion, is the environmental case.

The next major step for Epupa will be a public hearing to discuss the Draft Feasibility Report on 8 February.

The co-ordinating consultant, Burmeister of Namibia, has covered everything from power market surveys to health effects and come up with some environmental problems not seen in NGO reports.

Starting in July 1995, seven sites were looked at between Epupa and Marienfluss and then reduced to three, two near the Epupa falls at between 510-710m asl and a third down in the Baynes mountains at 380m — all are covered by the generic Epupa name.

Final evaporation clearly depends on dam size: figures are around 6 per cent of the total storage capacity of a dam with a wall height of 90m; half this for a smaller dam. Burmeister also found that the Kunene basin mean annual runoff was double the figures used under the old inter-country agreements. Sedimentation rates give between 145 years and 400 years. Load demand increases were estimated as favourably above World Bank stipulated levels of 3.5%.

The three schemes were:

•Scheme A of two dams with Dam A 4km upstream of Epupa and Dam C 10km downstream of Epupa, with a high water level at the toe level of the falls.

•Scheme B of one dam 6km downstream of Epupa, which will cover the falls.

•Scheme E of one dam 40km downstream of Epupa in the Baynes’ mountains.

All three were very good to excellent in geology. In terms of environmental advantages scheme E has the preferred dam site, but scheme B is marginally better than E in economic terms. None could be excluded at this stage on scientific environmental grounds.

A river delta study has concluded that there was no ‘natural flow’ and so no effect on the marine species or the marine eco-systems. This would be a function of the rules set to regulate flow from the dams. The studies says that green turtle populations at the river mouth and in the sea (not generally mentioned by the NGOs) might be affected if a big dam caused flow waters to drop in temperature.

A major irrigation scheme of 30 – 40 000 ha on the Angolan side of middle Kunene would require regulation of Kunene water, and serious pollution could occur as a result of fertilisers.

On the social front, the consultants report the strong opposition from a group of the Ovahimba people. They found that those living further away want the development of the Kaokoland region and see the hydropower scheme as a very important stepping stone. Angolan relatives of Chief Kapika, the local Namibian Epupa Himba headman opposing the dams, would accept downstream developments of Epupa if there was adequate compensation for the Himba.

This may prove to be the crux of the issue and the consultants may be aware of this. They have said that ‘with skilled management of change and wise compensation, scheme E stands out as the option with the best hope of success.’